The Opportunity Cost of an Alternate Course of Action That

question 154

Multiple Choice

The opportunity cost of an alternate course of action that is relevant to a make-or-buy decision is

• A) subtracted from the "Make" costs.
• B) added to the "Make" costs.
• C) added to the "Buy" costs.
• D) none of these.

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Definitions:

MC = P

A formula indicating that in perfect competition, the price (P) is equal to the marginal cost (MC) of producing an additional unit.

Economic Profits

The variance between complete earnings and aggregate expenses, taking into account both overt and covert costs.

Downward-Sloping Demand

A market scenario where the quantity demanded by consumers decreases as the price of the good increases, illustrating the inverse relationship between price and demand.

Downward Sloping

Describes a line or curve on a graph that represents a decrease or decline in value as one moves from left to right.