Marginal revenue reflects the change in revenue for each item when you sell multiple items compared to a single item. If you sell all of your items at the same price without a volume discount, your marginal revenue equals the per-item price. If you offer discounts based on volume, the marginal revenue varies based on the number of items sold. Use Microsoft Excel to calculate the marginal revenue and save yourself the time spent on manual calculations.

## Video of the Day

#### Step

Create a column in your Excel spreadsheet to list the item quantities for which you want to determine marginal revenue. For example, if you want to isolate the marginal revenue for one item compared to four items, enter 1 in the first cell of the column, then place 4 in the second cell of the column.

#### Step

Create a second column and place the revenue amount for one item in the row that lists one item. Place the revenue amount for four items in the row that is labeled for four items. For example, if you sell one item for $7 and four items for $25 total, place a 7 in the second column beside the "1" and enter "25" in the second column beside the "4."

#### Step

Generate the marginal revenue figure in the third column. Enter the calculation in the Excel function input section. The calculation should read "=SUM(B2-B1)/(SUM(A2-A1))." This calculation subtracts the difference in the total revenue, then divides it by the difference in the total number of items. For example, if you sell one item for $7 and four items for $25, the function would be (25-7)/(4-1) or 18/3. The marginal revenue in this case equals $6.