Marginal revenue analyzes the profitability of selling more products. The purpose of this calculation is to perform some comparisons in order to evaluate a decision of increasing the number of units being sold. The MR should be compared with the current price per unit or against the marginal cost of producing one more unit.
If the MR is equal to the price it means that in order to sale more units the company doesn’t have to change its price. This is not normally the case in practice because selling one additional unit is not a real life situation but this concept can also be applied to ranges of hundred units or even thousands. The MR should be compared with marginal cost and as long as the MR stays higher it will be profitable for the company to produce and sell an additional unit.
