When choosing between alternatives,the contribution margin of the next-best alternative is called
A)Incremental revenue.
B)Opportunity cost.
C)Sunk cost.
D)None of these ans choices are correct.

Question

Quizplus · Accepted Answer

The contribution margin of the next-best alternative is called opportunity cost. This cost represents the potential revenue that could be generated by choosing the next-best alternative instead of the chosen option. Therefore, when making a decision between alternatives, it is important to consider the opportunity cost and choose the option that generates the highest overall contribution margin.

When Choosing Between Alternatives,the Contribution Margin of the Next-Best Alternative