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Marginal Revenue

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Marginal Revenue

The difference in revenue earned by increasing production.

I make 100,000 pens earning a profit of $200,000. A customer wants to buy 10,000 additional pens. If I accept that order I will earn $220,000. The marginal revenue is $20,000, the difference between $220,000 and $200,000. It is the extra money I will earn by making 10,000 more pens.

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