When companies are considering outsourcing production any revenue earned by freed capacity is considered an opportunity cost from not outsourcing.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the benefits that could have been received by choosing an alternative option. In this case, if a company decides not to outsource production and instead uses the freed capacity to generate revenue, the potential revenue that could have been earned from outsourcing is considered an opportunity cost.

When Companies Are Considering Outsourcing Production Any Revenue Earned by Freed