Table 7-8
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.

-Refer to Table 7-8.You wish to purchase 10 piano lessons,so you take bids from each of the sellers.You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons.What bid will you accept?

Question

Table 7-8
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
 
-Refer to Table 7-8.You wish to purchase 10 piano lessons,so you take bids from each of the sellers.You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons.What bid will you accept?

Quizplus · Accepted Answer

The opportunity cost is the cost of giving up the next best alternative. In this case, the opportunity cost for each seller is shown in the table. The seller with the lowest opportunity cost is the best choice because they have the lowest cost of producing the lessons. The seller with the lowest opportunity cost in this case is Seller C, who has an opportunity cost of $249. Therefore, this is the bid that should be accepted as it is the lowest cost at which all 10 lessons can be provided. Choosing any higher bid would mean paying more than necessary for the same quality of lessons.

Table 7-8 The Numbers Reveal the Opportunity Costs of Providing 10 Piano