Two years ago, Dewald inherited R30 000 and decided to open a coffee shop in his hometown instead of buying shares in Tesla Motor Company.The rate of return he could have earned on his investment in Tesla shares represents his:

Question

Quizplus · Accepted Answer

The concept of opportunity cost refers to the cost of the next best alternative foregone. In this case, if Dewald had chosen to invest in Tesla shares, the return he could have earned on that investment is the opportunity cost of the funds he used to open the coffee shop. Therefore, B is the correct answer.

Two Years Ago, Dewald Inherited R30 000 and Decided to Open