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Finance Dictionary and Glossary of Investment Terms
marginal revenue
Definition 1.
The revenue associated with one additional unit of production. Whether this is higher, lower or the same as the revenue from the previous unit of production depends on the demand for the producer's product. In the case of a producer who supplies a very small percentage of the market, an extra unit of production is unlikely to have an effect on market prices. In this case, increased production will not affect marginal revenue. On the other hand, if the producers supplies most or all of the market (such as in a monopoly or near-monopoly), then increased production is likely to reduce marginal revenue.
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