The amount that a manufacturing company could earn by renting unused portions of its warehouse is an example of an opportunity cost.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the cost of the best alternative forgone when making a decision. In this case, the manufacturing company could earn money by renting out unused portions of its warehouse, but choosing not to do so means giving up that potential income, which is an example of opportunity cost.

The Amount That a Manufacturing Company Could Earn by Renting