Final answer:
When more action potentials arrive at the axon terminal, the postsynaptic cell is affected by an increase in neurotransmitter release, resulting in an increase in the frequency or magnitude of graded potentials in the postsynaptic cell.
Step-by-step explanation:
When more action potentials arrive at the axon terminal, the postsynaptic cell is affected by an increase in neurotransmitter release. This increase in neurotransmitter release can lead to an increase in the frequency or magnitude of graded potentials in the postsynaptic cell. Therefore, the correct answer is option C. Neurotransmitter release increases, thereby increasing the frequency or magnitude of graded potentials in the postsynaptic cell.