The seller of Product A has no idle capacity and can sell all it can produce at $50 per unit.Outlay cost is $12.What is the opportunity cost,assuming the seller sells internally?
A) $12
B) $38
C) $50
D) $62

Question

Quizplus · Accepted Answer

The opportunity cost is the profit forgone by not selling in the external market. Since the seller can sell all it can produce at $50 per unit in the external market, the opportunity cost is $50 - $12 = $38. Therefore, the best choice is B.

The Seller of Product a Has No Idle Capacity and Can