Producers must understand the marginal benefit of making an additional unit, which shows the:

• A. total profit earned from all units produced
• B. additional revenue generated from selling one more unit of output
• C. fixed cost associated with production
• D. average cost of producing each unit

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of marginal benefit in the context of production. Marginal benefit refers to the additional benefit or gain a producer receives from producing one more unit of output.
2. Step 2: Recognize that in microeconomics, the marginal benefit of producing an additional unit is typically measured by the additional revenue generated from selling that extra unit. This is known as marginal revenue.
3. Step 3: Differentiate marginal benefit from other related concepts: total profit is the overall gain from all units produced, fixed cost is the cost that does not change with output, and average cost is the cost per unit produced on average.
4. Step 4: Formally, marginal revenue (MR) can be expressed as the change in total revenue (TR) divided by the change in quantity (Q): \(\text{MR} = \frac{\Delta TR}{\Delta Q}\).
5. Step 5: Conclude that the marginal benefit of making an additional unit is the additional revenue generated from selling one more unit of output, which helps producers decide whether producing that extra unit is profitable.