What does the quantity effect refer to?

The quantity effect describes the change in total revenue that results from selling one additional unit of a good or service, which specifically highlights the revenue generated from that additional unit. When one more unit is sold, total revenue increases by the price at which that unit is sold. This concept is essential in understanding the relationship between price, quantity sold, and total revenue in microeconomics.

In a market scenario, when producers increase the quantity sold, the immediate revenue impact can be directly linked to the price of that additional unit. This illustrates how volume and pricing strategies interact to influence overall profitability.

It's important to note that while the other options discuss various aspects of revenue and cost, they do not accurately represent the quantity effect itself. The quantity effect is specifically about the revenue increase from one more unit sold, linking tightly to price in a straightforward manner.