The opportunity cost of producing a bicycle refers to

Question

Quizplus · Accepted Answer

The opportunity cost of producing a bicycle refers to the value of the goods that were given up to produce the bicycle. This includes the cost of the resources that could have been employed in producing an alternative product. Option A is incorrect because it only refers to the out-of-pocket payments made in the production process. Option C is incorrect because the bicycle's retail price is determined by various other factors such as demand, supply, and marketing. Option D is incorrect because the marginal cost only considers the additional cost of producing one more bicycle, whereas opportunity cost considers the value of the forgone alternative.

The Opportunity Cost of Producing a Bicycle Refers to