The concept of the margin (OCR A-Level Economics): Flashcards

Impact of one more unit

Additional satisfaction from consuming one more unit

Overall satisfaction from total quantity consumed

Additional satisfaction decreases with each extra unit consumed

Additional cost of producing one more unit

Additional revenue from selling one more unit

$MC = \frac{\Delta TC}{\Delta Q}$

$MR = \frac{\Delta TR}{\Delta Q}$

$MU = \frac{\Delta TU}{\Delta Q}$

Downward from left to right

Due to diminishing marginal utility

When MR > MC (marginal revenue exceeds marginal cost)