The Opportunity Cost of Making a Component Part in a Factory

question 54

Multiple Choice

The opportunity cost of making a component part in a factory with no excess capacity is the:

• A) variable manufacturing cost of the component.
• B) fixed manufacturing cost of the component.
• C) cost of the production given up in order to manufacture the component.
• D) net benefit foregone from the best alternative use of the capacity required.

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Definitions:

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Red-Line

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