w to calculate the marginal revenue produce
To calculate the marginal revenue produced, you need to gather data on the total revenue produced at different output levels. Here are the steps to calculate marginal revenue:
1. Determine the total revenue at different levels of output. For example, if you have the following data:
Level of Output (Q) | Total Revenue (TR)
----------------------------------
1 | 10
2 | 18
3 | 24
4 | 28
2. Calculate the change in total revenue (∆TR) between consecutive levels of output. In this example, the changes in total revenue are:
∆TR(1-2) = 18 - 10 = 8
∆TR(2-3) = 24 - 18 = 6
∆TR(3-4) = 28 - 24 = 4
3. Calculate the change in quantity (∆Q) between the corresponding levels of output. In this example, the changes in quantity are:
∆Q(1-2) = 2 - 1 = 1
∆Q(2-3) = 3 - 2 = 1
∆Q(3-4) = 4 - 3 = 1
4. Calculate the marginal revenue (MR) by dividing the change in total revenue (∆TR) by the change in quantity (∆Q). In this example:
MR(1-2) = ∆TR(1-2)/∆Q(1-2) = 8/1 = 8
MR(2-3) = ∆TR(2-3)/∆Q(2-3) = 6/1 = 6
MR(3-4) = ∆TR(3-4)/∆Q(3-4) = 4/1 = 4
Therefore, the marginal revenue produced at each level of output is 8, 6, and 4, respectively.