Final answer:
Marginal revenue is calculated as the change in total revenue divided by the change in quantity sold and is used by firms to make decisions about output and pricing to maximize profits.
Step-by-step explanation:
Marginal revenue is a critical concept in microeconomics and business, especially when it comes to making decisions about production and pricing. To find marginal revenue, you can use the revenue information for different quantities sold. Specifically, marginal revenue is calculated by taking the change in total revenue that results from selling one additional unit of a product and dividing it by the change in the quantity sold.
For example, if a company increases its output from 4 to 5 units, and its total revenue increases from $2400 to $2800, the marginal revenue for producing the fifth unit would be ($2800 - $2400) / (5 - 4) = $400.
This information often forms a part of a table or chart, where the combination of price and quantity at each point on the demand curve is utilized to calculate the total and marginal revenues, alongside other financial metrics like total cost, marginal cost, and average cost. Firms use this data to determine the optimal quantity of products to supply at specific prices, ensuring they maximize profits.