The Strike King Lure Co. ordered $100,000 worth of stainless steel to use in the production of fishing lures. The $100,000 expenditure represents the:
A) value of the stainless steel in its lowest valued use.
B) profits of selling fishing lures.
C) value of the stainless steel in its next highest valued use.
D) revenues of producing fishing lures minus the costs.

Question

Quizplus · Accepted Answer

The $100,000 expenditure represents the opportunity cost, which is the value of the stainless steel in its next highest valued use.