Income forgone from not using an asset in its best economic alternative is an example of which of the following type of cost?
A)outlay cost.
B)direct cost.
C)indirect cost.
D)opportunity cost.

Question

Quizplus · Accepted Answer

This situation is an example of opportunity cost, which refers to the cost of forgoing the next best alternative. In this case, the income forgone by not using the asset in its best economic alternative is the opportunity cost. The other answer choices are not applicable in this situation.

Income Forgone from Not Using an Asset in Its Best