equal to the marginal cost (MC). MR = MC > profit maximisation As long as the marginal revenue is greater than the marginal cost, the marginal revenue contributes towards total profits. By producing and selling an additional unit, the producer gains more than it costs to produce the additional unit and its profits increase. MR > MC > profits increase When marginal revenue is less than marginal cost total profits will decline. It is costing the firm more to produce the additional unit than it gets from selling the additional unit. It is therefore not in the interest of the firm to produce the extra unit. MR profits decline