Opportunity cost of an activity

Question

​Opportunity cost of an activity

Quizplus · Accepted Answer

Opportunity cost refers to the cost of foregone opportunity or alternative. It may include both monetary costs as well as the foregone income that could have been earned by pursuing an alternative activity. Therefore, option C is the correct choice. Option A is incorrect because accounting costs only consider the monetary expenses incurred for an activity. Option B is incorrect as opportunity cost may include monetary costs. Option D is also incorrect as opportunity cost cannot be known with certainty as it is based on assumptions and judgments about the alternatives.

​Opportunity Cost of an Activity

Opportunity Cost of an Activity