Which of the Following Best Defines an Opportunity Cost

question 21

Multiple Choice

Which of the following best defines an opportunity cost?

• A) The difference in total costs from selecting one alternative instead of another.
• B) The benefit forgone by selecting one alternative instead of another.
• C) A cost that may be saved by NOT adopting an alternative.
• D) A cost that may be shifted to the future with little or no effect on current operations.

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Definitions:

AVC Curve

Represents the Average Variable Cost Curve, which shows the relationship between a firm's output and the variable costs per unit of output, typically declining and then rising.

AFC Curve

The Average Fixed Cost curve, which represents the fixed costs of production divided by the quantity of output produced, typically demonstrating a downward slope as output increases.

ATC Curve

In economics, the Average Total Cost curve is a graphical representation that shows the per-unit cost of production (total cost divided by the quantity produced) at different levels of output.

ATC Curve

The ATC Curve, or Average Total Cost curve, represents the average cost per unit of output, calculated by dividing total cost by the quantity of output produced.