The benefit foregone by NOT choosing an alternative course of action is referred to as a(n):

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative that is forgone when making a decision. It is the benefit or return that could have been earned if the alternative action was chosen. Option A, variable cost, refers to a cost that changes with the level of production or sales, and is not relevant in this scenario. Option B, sunk cost, is a cost that has already been incurred and cannot be recovered, and is also not relevant in this scenario. Option D, incremental cost, is the change in cost that results from a change in activity level, and is also not relevant in this scenario.  So, the best choice is C.

The Benefit Foregone by NOT Choosing an Alternative Course of Action