Final answer:
Total revenue is the income generated from selling a firm's products and can be calculated by multiplying the price of the product by the quantity of output sold. The additional revenue generated by an additional unit of output is the firm's marginal revenue, which may not necessarily be the price. Firms with market power, like a monopoly, face a downward sloping demand curve and must lower their price to sell additional output.
Step-by-step explanation:
Total revenue is the income generated from selling a firm's products and is calculated by multiplying the price of the product by the quantity of output sold. The additional revenue generated by an additional unit of output is the firm's marginal revenue, not necessarily the price. For firms with market power, like a monopoly, the marginal revenue is less than the price because they face a downward sloping demand curve. This means that in order to sell additional output, the firm must lower its price.