Question
What is the best definition of marginal revenue? the possible income from producing an additional item the price of producing one additional unit of a good the additional income gained from selling an additional good the financial gain from business activity minus expenses
Ask by Stewart Grant. in the United States
Mar 06,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
Marginal revenue is the additional income from selling one more unit of a product.
Solution
The best definition of marginal revenue is:
**the additional income gained from selling an additional good.**
Marginal revenue specifically refers to the increase in revenue that results from the sale of one more unit of a product.
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Simplify this solution The Deep Dive
Marginal revenue, at its core, is all about the extra cash! It’s specifically the additional income earned from selling one more unit of a product. So, if you have a lemonade stand and you sell one more cup than you usually do, the money you make from that extra cup is your marginal revenue. When businesses analyze marginal revenue, they can improve production decisions and pricing strategies. If the revenue from selling another unit exceeds the cost of producing it, it’s a win-win! This concept is super important for maximizing profit and ensuring sustainability in any business model. Who knew that selling just one more can really make a difference?
