How To Calculate Marginal Revenue in BQE CORE Suite | Arithmix

Calculating marginal revenue can be a daunting task, but with the right tools and knowledge, it can be a valuable tool for any business. Marginal revenue is the additional revenue generated by producing and selling one more unit of a product or service. It is important to understand how to calculate marginal revenue because it can help businesses make informed decisions about pricing, production, and overall profitability.

What Is Marginal Revenue?

Marginal revenue is the change in total revenue that results from producing and selling one additional unit of a product or service. It is calculated by dividing the change in total revenue by the change in the quantity of units sold. For example, if a company sells 100 units of a product for $10 each and then sells 101 units for $9.50 each, the marginal revenue for the 101st unit would be $4.50 ($959.50 - $1,000).

Marginal revenue is important because it helps businesses determine the optimal price and quantity of a product or service to sell. By understanding the relationship between price and quantity, businesses can make informed decisions about how to maximize revenue and profits.

When Is It Valuable To Calculate Marginal Revenue?

Calculating marginal revenue is valuable in a variety of situations. For example, if a business is considering lowering the price of a product, it can use marginal revenue to determine whether the decrease in price will result in an increase in revenue. If the marginal revenue is positive, then the business can expect to generate more revenue by lowering the price. If the marginal revenue is negative, then the business should not lower the price.

Marginal revenue is also useful in determining the optimal quantity of a product to produce and sell. By calculating the marginal revenue at different levels of production, businesses can determine the point at which the marginal revenue equals the marginal cost. This is known as the profit-maximizing level of production and is the point at which the business will generate the most profit.

In conclusion, calculating marginal revenue is an important tool for any business looking to maximize revenue and profits. By understanding the relationship between price and quantity, businesses can make informed decisions about pricing, production, and overall profitability. With the right tools and knowledge, calculating marginal revenue can be a valuable asset to any business.

How Do You Calculate Marginal Revenue in BQE CORE Suite

BQE CORE Suite itself isn’t naturally geared towards letting you calculate complex metrics like Marginal Revenue. As an alternative, teams typically use products like Arithmix to import data from BQE CORE Suite and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like BQE CORE Suite, combine it with data from other systems, and create calculations like Marginal Revenue.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Marginal Revenue in Arithmix

Calculating metrics like Marginal Revenue is simple in Arithmix. Once you've created your free account, you’ll be able to import your BQE CORE Suite data, and use it to create natural language formulas for metrics like Marginal Revenue.

Arithmix is designed to give you the power to build any calculations you want on top of your BQE CORE Suite data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.