A retailer opened 10 new home appliance stores.The same resources could have been used to expand its 15 existing stores into category killer stores.While the retailer earned $600,000 last year,it figures it could have earned $1,000,000 if it went with the larger store alternative.Its opportunity costs last year were ________.
A) $400,000
B) $600,000
C) $1,600,000
D) The answer cannot be determined based on the information provided.

Question

Quizplus · Accepted Answer

The opportunity cost is the difference between what was actually earned ($600,000) and what could have been earned with the next best alternative ($1,000,000), which is $400,000.

A Retailer Opened 10 New Home Appliance Stores