The numerical values for the functional relationships in Table 3.2 are given in
Table 3.3. The first two columns of Table 3.3 show the values of the demand function
and the inverse relationship between price and quantity demanded. Column 3
presents total revenue for the different levels of output. Column 4 shows marginal
revenue calculated in discrete terms, which represents the change in total revenue
between one and two units of output, between two and three units of output, and
so on. Column 5 shows marginal revenue calculated from the marginal revenue
function presented in the last line of Table 3.2. In this case, marginal revenue is calculated
for an infinitesimal change in output that occurs at a given level of output.
Thus, Column 5 shows marginal revenue calculated precisely at a given level of
output compared with the Column 4 calculations of marginal revenue between different
levels of output. You will notice that the values in Columns 4 and 5 are very
similar. The differences between Columns 4 and 5 are similar to the differences
between the arc and point price elasticities of demand we discussed earlier in the
chapter. Remember that these are differences in the calculation of the numbers,
not in the definition of the concepts