An opportunity cost is
A) the benefits of the highest-valued alternative forgone.
B) another term for all the sunk costs.
C) the dollar amount that is paid.
D) whatever is paid out and cannot be reduced or reversed.
E) anything the decision maker believes costs to be.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the benefits that are sacrificed or foregone when one chooses to pursue one option over another. It is the value of the next-best alternative that must be given up or forgone as a result of choosing a particular option. A is the correct answer as it accurately defines opportunity cost.

An Opportunity Cost Is