An opportunity cost is defined as:

Question

Quizplus · Accepted Answer

An opportunity cost refers to the cost of choosing one option over another. In other words, it is the potential profit or benefit that is lost from not choosing the next best alternative. Therefore, option A accurately defines the concept of opportunity cost. Option B refers to a different concept, which is the opportunity to increase revenue by not dropping a product. Option C refers to incremental cost, which is related to the cost of producing additional units or accepting an additional order. Option D is incorrect as opportunity cost is relevant even if there is excess capacity.

An Opportunity Cost Is Defined As