If a company does not use one of its limited resources in the best possible way, the lost contribution to income could be called a(n) ________.
A) business function cost
B) carrying cost
C) opportunity cost
D) sunk cost

Question

Quizplus · Accepted Answer

Opportunity cost is the cost incurred by not choosing the next best alternative. In other words, it is the cost of the forgone opportunity. If a company fails to utilize a limited resource to its maximum potential, it incurs an opportunity cost in terms of lost income or profit. This cost can be significant, and it is important for companies to make decisions that maximize their use of available resources. The other options provided (A, B, and D) do not accurately describe the cost incurred due to inefficient resource utilization.

If a Company Does Not Use One of Its Limited