The opportunity cost of a firm's inputs:
A) depends on who supplies them to the firm.
B) includes implicit costs but does not include explicit costs.
C) includes explicit costs but does not include implicit costs.
D) should not concern anyone but economists.
E) is the value of the inputs in their most highly valued alternative use.

Question

Quizplus · Accepted Answer

The opportunity cost of a firm's inputs is the value of the inputs in their most highly valued alternative use. This includes both implicit and explicit costs and is an important factor for the firm to consider in making production decisions.

The Opportunity Cost of a Firm's Inputs