The cost of a resource that has no alternative use in a make or buy decision problem has an opportunity cost of zero.

Question

Quizplus · Accepted Answer

This statement is true. The opportunity cost is the cost of the next best alternative that must be given up to obtain something, but if a resource has no alternative use, there is no opportunity cost associated with it. Therefore, its opportunity cost is considered to be zero in a make or buy decision problem.

The Cost of a Resource That Has No Alternative Use