The additional revenue a monopolist receives from selling an additional unit of output is known as:

• A. total revenue
• B. average revenue
• C. marginal revenue
• D. profit

Answer: (C)

Verified step by step guidance

1. Understand the concept of revenue in the context of a monopolist: Total Revenue (TR) is the total income from selling a certain quantity of goods, calculated as price (P) times quantity (Q), so \(TR = P \times Q\).
2. Recognize that Average Revenue (AR) is the revenue per unit sold, which is \(AR = \frac{TR}{Q}\), and in a monopoly, AR equals the price of the good.
3. Define Marginal Revenue (MR) as the additional revenue gained from selling one more unit of output. Mathematically, it is the change in total revenue divided by the change in quantity: \(MR = \frac{\Delta TR}{\Delta Q}\).
4. Note that in a monopoly, marginal revenue is generally less than the price because to sell an additional unit, the monopolist must lower the price on all units sold, which affects total revenue.
5. Conclude that the term describing the additional revenue from selling one more unit is 'marginal revenue', distinguishing it from total revenue, average revenue, and profit.