If you own a building and you decide to use that building to open a book store,
A) there is no opportunity cost of using this building for a book store because you own it.
B) there is an opportunity cost of using this building for a book store because it could have been used in other ways.
C) the opportunity costs equal the cost of inventory.
D) the only cost relevant to this decision is the price you paid for the building.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. In this case, using the building for a bookstore means forgoing any other potential uses of the building, such as renting it out, using it for a different type of business, or selling it. These foregone opportunities represent the opportunity cost of the decision to open a bookstore.

If You Own a Building and You Decide to Use