An Opportunity Cost Is the

question 141

Multiple Choice

An opportunity cost is the

• A) lowest possible cost.
• B) highest possible cost.
• C) monetary price paid for a good or service.
• D) cost of a purchase or decision as measured by what is given up.
• E) cost of finding the lowest price for a product.

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Definitions:

Variable Cost Ratio

A measure of a company's variable costs as a percentage of sales, which shows the proportion of sales that is consumed by variable costs.

Profit-Volume Ratio

A measure that illustrates how profits will change with a change in volume, showing the relationship between profit and sales levels.

Mixed Cost

A cost that contains both variable and fixed cost elements, changing in total with the level of activity but having a portion that remains constant.

Variable Cost

Costs that vary directly with the level of production or service activity.