The concept of opportunity cost
A) is relevant only to economics.
B) can be applied to the analysis of any decision-making process.
C) applies to consumers but not to firms.
D) refers only to actual payments and incomes.

Question

Quizplus · Accepted Answer

Opportunity cost is a fundamental concept in economics that applies to any decision-making process, not just economic decisions. It represents the cost of forgoing the next best alternative when making a choice, and it is relevant to both consumers and firms, as well as decisions that do not involve actual payments or incomes.

The Concept of Opportunity Cost