Which Statement Is True of an Opportunity Cost

question 31

Multiple Choice

Which statement is true of an opportunity cost?

• A)It is the cost of a special order option.
• B)It reduces the possibility of accepting a particular course of action.
• C)It is the potential benefit as a result of following an alternative course of action.
• D)It is a variable cost.

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Definitions:

Total Cost

The sum of fixed and variable costs incurred by a firm in producing or offering a product or service.

Total Cost

The complete cost of producing a given amount of goods or services, including both fixed and variable costs.

Producing Bagels

Refers to the process of making bagels, which includes mixing, shaping, boiling, and baking the dough.

Average Total Cost

The total cost of production divided by the number of units produced, indicating the cost per unit of output.