Solution:

Marginal Revenue refers to the rise in the revenue as a result of sale of an additional unit in terms of the output. It can be said that is marginal is constant over a period of time, the latter follows the law of diminishing returns which results in the decrease in the productivity. The firms that are deemed to be perfectly competitive continue the process of production until the marginal cost is equal to the marginal revenue.

Example:

Cost of producing 1 TV is $100

Cost of producing 2 TVs is $190

Then, the marginal cost comes to $(190-100) = $90

Formula of Marginal Revenue = Change in Total Revenue / Change in Quantity sold

It is calculated by diving the total revenue by the change in the quantity of output sold.