In a competitive market, marginal revenue usually equals the price of the product. If you price your units at $15 each, each added unit brings $15 marginal revenue.

Put it together, and the marginal revenue derivative is $20 - (q / 5). So if you make 50 units of a product, the marginal revenue derivative will be $20 - 50 / 5, or $10.

Continuing with the example, divide the $150 marginal revenue product of labor by the marginal product of labor of 10 to get a price of $15 per hat. This means that, in a perfectly competitive ...

Calculating Diminishing Marginal Returns in Excel To calculate the diminishing marginal return of product production, obtain values for the production cost per unit of production.