Opportunity cost is
A) the variable cost a firm incurs by increasing output 1 unit.
B) the value of the best alternative use of a firm's resources.
C) the output opportunities a firm gains when average fixed costs decline.
D) another name for explicit costs.
E) the difference between fixed cost and variable cost.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the best alternative use of a firm's resources. This means that if a firm decides to use its resources for one purpose, the opportunity cost is the value of the best alternative use of those resources that the firm gave up.

Opportunity Cost Is