How does Magic Find affect loot drops?

Solution 1:

I tried doing a small scale test using my lowest magic find vs my max all on u6.

I only calculated chance of magic find occurring while opening chests. 400 magic find (my lowest) = 31 / 100 chest opened, 31% chance of magic find occurring. 601 magic find (my highest) = 38 / 100 chests opened, 38% chance of magic find occurring.

However, I do feel the need to throw this out there even though it may be completely irrelevant.

400 magic find - average loot quality lv2 shadow items. Highest drop - level 3 item.

601 magic find - average loot quality level 2 shadow items, (more than 400 magic find < the confusing part) Highest drop - level 4 item.