What is the simple meaning of opportunity cost in business?
Answer and explanation
Correct answer: The value of the next best alternative given up when one option is chosen
Opportunity cost is the value of the next best alternative sacrificed when a choice is made. For example, if business funds are used for equipment instead of advertising, the benefit that advertising could have produced is the opportunity cost. It is not total expenditure, a discount, or guaranteed profit.
Frequently asked questions
What is the correct answer to this question?
The value of the next best alternative given up when one option is chosen
Why is this the correct answer?
Opportunity cost is the value of the next best alternative sacrificed when a choice is made. For example, if business funds are used for equipment instead of advertising, the benefit that advertising could have produced is the opportunity cost. It is not total expenditure, a discount, or guaranteed profit.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: MSME and Business Entrepreneurship. Topic: Entrepreneurship Development.
