Overview
Marginal revenue is the amount earned by a company when they sell an additional unit of products. There is always a marginal cost attached to it, which should be accounted for in financial analysis. The formula for calculating marginal revenue is: Marginal Revenue = Change in Revenue / Change in Quantity The concept can be further examined using a curve. When we graph the marginal revenue using quantity as the x-axis and price as the y-axis, we would expect the curve to slope downwards. This is explained by the law of diminishing margin, which states that as a company sells more products over the normal limit, the price of its products would also need to go down to drive demand (quantity).

Using This Excel Template

This Excel calculator is a simple and easy-to-use tool to help accounting beginners calculate the financial figures by inputting the required data. Enter your inputs in the cells with blue font (common practice in financial modeling), then your outputs will be generated in the cells with black font.

Learn More About Marginal Revenue

Read CFI's complete guide on this topic to have a better grasp of the concept, or start browsing other accounting templates on CFI Marketplace!  
Share
Reviews Add a review
No reviews yet

More From Corporate Finance Institute®

Browse our top rated business templates. See All
Financial Institution Dividend Discount Model
373
0
The financial institution dividend discount model uses future dividends to find the implied share price. This model is based on…
Loan Payment Calculator
264
0
The loan payment calculator allows users to determine the principal and interest payment each month until the full balance of…
DDM - Excel Dividend Discount Model Template
328
25
The dividend discount model template allows investors to value a company base on future dividend payments. This is based on…
Non-directional trading strategy template Non-directional Trading Strategies Template
313
0
The non-directional trading strategies template allow users to determine the profit when buying options. This template focuses on non-directional strategies…
restructuring financial model template preview 1 Restructuring Financial Model Template
549
0
This restructuring financial model template is used to demonstrate the financial interactions behind the restructuring process. Adjust this model to…
TMT Financial Model Template Preview TMT Financial Model Template
731
0
This TMT financial model template is used to value technology, media, and telecom firms. This model provides a template to…