A small business owner is planning to purchase a new office computer for $1,000. The opportunity cost of purchasing this computer is
A) $900
B) $1,000
C) $1,100
D) Unknown, since we don't know the owner's next best alternative.

Question

Quizplus · Accepted Answer

The opportunity cost of purchasing the computer is the value of the next best alternative foregone, which in this case is the $1,000 that could have been spent on something else. Therefore, the opportunity cost is the same as the cost of the computer itself, which is $1,000.

A Small Business Owner Is Planning to Purchase a New