The opportunity cost of production differs from an accounting definition of a firm's costs because it includes
A) expenditures the firm undertakes for research and development.
B) the opportunity cost of assets and financial resources owned by the firm.
C) the direct monetary cost of purchasing resources.
D) the firm's revenue as a cost.

Question

Quizplus · Accepted Answer

Opportunity cost includes the value of the next best alternative use of resources, such as the potential income from assets and financial resources owned by the firm, which is not considered in traditional accounting costs.

The Opportunity Cost of Production Differs from an Accounting Definition