If Talium Services Inc.does not use one of its limited resources in the best possible way,the lost contribution to income could be called a(n)________.
A) business function cost
B) carrying cost
C) opportunity cost
D) sunk cost

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative that is foregone when a decision is made. In this case, if Talium Services Inc. does not use one of its limited resources in the best possible way, the value of the next best use of that resource represents the opportunity cost. This cost is important to consider in decision-making as it represents the potential lost contribution to income. Options A, B, and D are not relevant as they do not specifically refer to the foregone value of an alternative use of a resource.