The increase in total revenue that results from selling one more unit of output is called:

• A. Total profit
• B. Marginal cost
• C. Average revenue
• D. Marginal revenue

Answer: (D)

Verified step by step guidance

1. Understand the concept of total revenue (TR), which is the total amount of money a firm receives from selling its output. It is calculated as \(TR = P \times Q\), where \(P\) is the price per unit and \(Q\) is the quantity sold.
2. Recognize that marginal revenue (MR) is defined as the additional revenue gained from selling one more unit of output. Mathematically, it is the change in total revenue when quantity increases by one unit: \(MR = \Delta TR / \Delta Q\).
3. Differentiate marginal revenue from other terms: total profit is total revenue minus total cost, marginal cost is the additional cost of producing one more unit, and average revenue is total revenue divided by quantity (\(AR = TR / Q\)).
4. Identify that the problem asks for the term describing the increase in total revenue from selling one more unit, which matches the definition of marginal revenue.
5. Conclude that the correct term for the increase in total revenue from selling one more unit is marginal revenue.