A revenue that differs between alternatives and makes a diff

A revenue that differs between alternatives and makes a difference in decision-making is called a(n)

Solution

The answer is INCREMENATAL REVENUE.

The word incremental revenue derives its importance from the concept called incremenal analysis or differential analysis.

So It is easy understand incremental revenue if we get know what is incremental analysis.

Incremental analysis: It is one of those techniques used in the business to ascertain the true loss/profit difference between alternatives. Lets explain this concept with an example.

Let\'s say there is a manufacturig company and it produces a product X. The product\'s sellling price is $10 per unit in the open market. This product has a potential of generating revenue of $15 per unit if it is pocessed furthur more. So now the company manager has to decide whether to process the product furthur more or to sell the product withot process it furthur. So there are two alternatives available here.

Incremental analysis technique can be helpful in the circumstances like above to decide which is beneficial by calculating incremental Profit/loss.

Incremetal loss/profit = Incremental revenue - Incremental cost

In the above example incremantal revenue is $ 5per unit. ($15 - $10)

Hope this is useful and thank you!!!!!!