Calculate marginal benefit per unit from changes in total benefit and quantity, or build a benefit schedule to compare intervals and trends.
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Marginal Benefit Formula
The following equation calculates average marginal benefit over a quantity interval. When the interval is one unit, it gives the benefit of that additional unit.
- Where MB is the marginal benefit
- B1 and B0 are the final and initial benefits respectively
- Q1 and Q0 are the final and initial quantities respectively
To calculate the marginal benefit, divide the change in benefit by the change in quantity.
Marginal Benefit Definition
Marginal benefit measures the added benefit of an additional quantity of a good or service. This calculator uses monetary total benefit and reports the average change per unit over the chosen interval; benefit need not equal sales revenue.
Marginal Benefit Example
How to calculate a marginal benefit?
- First, determine the initial and final benefits.
Measure the relative initial and final monetary benefits of the product.
- Next, determine the initial and final quantities.
Measure the initial and final quantities of the product.
- Finally, calculate the marginal benefit.
Use the equation above to calculate the marginal benefit.
FAQ
Marginal benefit is the additional benefit from an additional quantity. This calculator divides a change in monetary total benefit by a nonzero change in quantity to report an interval average. Benefit is not necessarily sales revenue.
