Marginal revenue is the change in
Blank
______ revenue associated with a single-unit change in output.

Question

Marginal revenue is the change in 
Blank
______ revenue associated with a single-unit change in output.

BlackTom AI · Accepted Answer

The question asks about the term marginal revenue and its definition in relation to output.
Option 1: 'incremental' — While marginal revenue deals with the additional revenue from producing one more unit, the standard textbook definition specifies the change in total revenue, not just any incremental measure. The term 'incremental' can be ambiguous and doesn’t explicitly convey the focus on total revenue.
Option 2: 'average' — This is incorrect because average revenue is total revenue divided by quantity (often equal to price in perfect competition), whereas marginal revenue is about the change in revenue from a one-unit change in output, not the revenue per unit on average.
Option 3: 'total' — This aligns with the precise definition: marginal revenue is the change in total revenue resulting from a one-unit increase in output. It captures the incremental impact on the entire revenue figure, not just per-unit metrics.
Option 4: 'hypothetical' — This is not how marginal revenue is defined. Marginal revenue is an observable (or model-implied) change in total revenue from a small production change, not a hypothetical concept.
In summary, the key distinction is between total revenue and per-unit or broader notions; marginal revenue specifically references the change in total revenue for a one-unit change in output, which makes 'total' the correct descriptor.

Marginal revenue is the change in Blank ______ revenue associated with a single-unit change in output.

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