Marginal revenue formula is used to find the difference in the total turn over as a result of the sale of one additional unit. The formula varies in two different ways based on the information given. Change in total revenue divided by change in number of items sold or total turnover before sale of one unit minus total turnover after sale of one unit is marginal revenue.
This marginal revenue formula uses the latter one. Total revenue earned before selling the additional unit (r1) minus total revenue after the additional unit is sold (r2).
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