OP answer is good, but i'll be more specific.
MMR is basically the game calculating how GOOD of a player you could be, and how BAD.
Say in a gold 5's case, the BEST player he could be is gold 1, but the WORST he could be is silver 5 (What the game decided).
So the game averages that out and puts him against players in that specific region, if there are none then they go higher or lower generally higher.
Check your MMR through op.gg, select your region, type in your name and click 'calculate mmr'. OP.GG algorithm is the most reliable , but can only be used with SOLO q mmr.