When We Choose a Particular Option, We Must Give Up

question 434

Multiple Choice

When we choose a particular option, we must give up alternative options. The highest-valued alternative forgone is the ________ of the option chosen.

• A) opportunity cost
• B) comparative advantage
• C) nonmonetary cost
• D) absolute advantage

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Definitions:

Marginal Revenue

The increase in profit from selling an extra unit of a good or service.

Average Nightly Room Rate

A measure used in the hospitality industry to calculate the average price paid per room per night.

Monopolistic Competition

A marketplace setup where plenty of businesses distribute products that resemble each other but are not duplicates, allowing them a partial degree of marketplace power and the ability to individualize their offerings.

Pure Competition

A market structure characterized by a large number of small firms, homogenous products, and easy market entry and exit, leading to price takers rather than price makers.