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Part $1$

The U$.$S$.$ Postal Service$($USPS$)$ charges Amazon about$$ $$2$ to deliver a package. The USPS argues that its contract with Amazon allows it to reduce the loss it suffers on its overall operations. A business writer for the Washington Post$$ observes:

$"$Looked at from the standpoint of incremental revenue$($huge$)$ minus these incremental expenses$($modest$),$ the Postal Service could very easily have come to the conclusion$$ that, even at$$ $$2$ a$$ package, the Amazon contract was likely to be highly$$ profitable."

$$Sources: Eli$$ Rosenberg, "Trump Said Amazon Cost The the USPS$$ 'Billions.$\text{'}$ But the Post Office Has a Different$$ Explanation." Washington

Post$,$

May$11,2018.$

What does the writer mean by$$ "incremental revenue" and$$ "incremental cost"? Why would he focus on incremental revenue and incremental cost rather than on total revenue and total$$ cost$?$

$"$Incremental$"$ means the same thing as

A$.$

$"$marginal$."$ If the marginal revenue exceeds the marginal$$ cost$,$ the$$ USPS's profit will decrease. If the marginal cost exceeds the marginal$$ revenue, the$$ USPS's profit will increase.

B$.$

$"$marginal$."$ If the marginal revenue exceeds the marginal$$ cost$,$ the$$ USPS's profit will increase. If the marginal cost exceeds the marginal$$ revenue, the$$ USPS's profit will decrease.

C$.$

$"$extra$."$ Since this is an$$ "all or$$ nothing" decision, incremental revenue and incremental cost rather than total revenue and total cost must be examined.

D$.$

$"$additional$."$ Since this is an$$ "all or$$ nothing" decision, incremental revenue and incremental cost rather than total revenue and total cost must be examined