An opportunity cost can best be described as the:
A) pricing of goods as per market trends.
B) direct expenses incurred in producing goods.
C) total difference in cost of production between two divisions.
D) the benefit that is foregone for one alternative in order to pursue another alternative.

Question

Quizplus · Accepted Answer

An opportunity cost refers to the benefit that is lost or foregone when choosing one alternative over another. It is the cost of the next best alternative that is forgone. Therefore, choice D is the correct description of opportunity cost. Choices A, B, and C are not accurate descriptions of opportunity cost.

An Opportunity Cost Can Best Be Described as The