The seller of a product has no idle capacity and can sell all it can produce at $11 per unit.Outlay cost is $3.Assuming the seller can sell internally,what is the opportunity cost?
A)$2
B)$4
C)$8
D)$11

Question

Quizplus · Accepted Answer

The opportunity cost is the forgone benefit from the best alternative, which in this case is selling the product externally at $11 per unit. Since the outlay cost is $3, the net benefit from selling externally is $11 - $3 = $8, making the opportunity cost $8.

The Seller of a Product Has No Idle Capacity and Can