Which of the following would be categorized as an opportunity cost?
A.not being able to spend your $10,000 savings if you sink the money in your business
B.the cost of purchasing supplies for your house-cleaning business
C.the cost of purchasing auto insurance for your dry-cleaning delivery business

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative foregone. In this case, not being able to spend your $10,000 savings because it is invested in your business is the opportunity cost. The cost of purchasing supplies and auto insurance are regular business expenses, not opportunity costs.

Which of the Following Would Be Categorized as an Opportunity