<h2>Marginal Revenue (MR)</h2>
<p>Marginal Revenue (MR) is the additional revenue a business gains from selling one more unit of a product or service. It's a key concept in economics and finance, crucial for understanding production and pricing decisions.</p>

<h2>How It Works</h2>
<p>MR is calculated as the change in total revenue (TR) divided by the change in quantity sold (Q). Mathematically, it's expressed as:</p>
<table>
<tbody>
<tr>
<td><strong>MR</strong></td>
<td>=</td>
<td>ΔTR / ΔQ</td>
</tr>
</tbody>
</table>
<p>Here, Δ represents a change, TR is total revenue, and Q is the quantity sold.</p>
<p>In the context of a business, MR can also be calculated as the price of the product (P) minus the marginal cost (MC) of producing one more unit:</p>
<table>
<tbody>
<tr>
<td><strong>MR</strong></td>
<td>=</td>
<td>P - MC</td>
</tr>
</tbody>
</table>
<p>Marginal cost is the change in total cost (TC) divided by the change in quantity (Q).</p>

<h2>Why It Matters for Traders</h2>
<p>Understanding MR is vital for traders for several reasons:</p>
<ul>
<li>Profit Maximization: Businesses and traders aim to maximize profits. MR helps in deciding the optimal quantity to produce or trade, as profit is maximized where MR equals marginal cost (MR = MC).</li>
<li>Pricing Decisions: MR helps in setting prices. If MR is positive, increasing the price will increase total revenue. If MR is negative, decreasing the price will increase total revenue.</li>
<li>Risk Assessment: MR can help assess risk. If MR is high, a small decrease in sales can significantly impact revenue. If MR is low, sales can fluctuate more without major revenue impacts.</li>
</ul>

<h2>Example</h2>
<p>Consider a trader selling a product for $100 with a marginal cost of $60. The marginal revenue is:</p>
<table>
<tbody>
<tr>
<td><strong>MR</strong></td>
<td>=</td>
<td>$100 - $60</td>
<td>=</td>
<td>$40</td>
</tr>
</tbody>
</table>
<p>This means for every additional unit sold, the trader makes an extra $40 in revenue.</p>

<h2>Key Takeaways</h2>
<ul>
<li>Marginal Revenue (MR) is the additional revenue gained from selling one more unit.</li>
<li>MR is maximized where it equals marginal cost (MR = MC), indicating the optimal quantity for profit maximization.</li>
<li>MR helps in pricing decisions and risk assessment, affecting a trader's strategy and risk management.</li>
</ul>