Misty has the option of purchasing one of three products: Brand A, Brand B, or Brand C. Each costs ten dollars. If she decides that Brand A meets her needs best, then the opportunity cost of this decision is
A) Brand B plus Brand C.
B) twenty dollars.
C) Brand A.
D) Brand B or Brand C, depending on which is considered the highest-value alternative forgone.

Question

Quizplus · Accepted Answer

The opportunity cost of a decision is the value of the next best alternative that is not chosen. In this case, if Misty chooses Brand A, the opportunity cost is the value she would have received from the highest-value alternative she did not choose, which could be either Brand B or Brand C, depending on which one she values more.

Misty Has the Option of Purchasing One of Three Products