Question

how do you get to that MR formula? The formula I have for my class is MR = chg in TR/chg in Q

Answer 1

MR is the revenue from the production of an extra output,

which means the marginal revenue is the additional revenue in total revenue if the output increases.

Which we write as

MR=change in TR/change in Q

Ex.

The revenue from 10 output is 100 and the 11 quantity is 115

then the marginal revenue=change in total revenue/change in quantity

=(115-100)/(11-10)

=15

The formula we get from the theoretical concept but if you need the function then that we get by the first derivative of total revenue but that is mathematics which is backed by economics theory so we get the formula from the definition of marginal revenue.