Which of the Following Is True of Opportunity Costs

question 12

Multiple Choice

Which of the following is true of opportunity costs?

• A)Not included in initial cash flow
• B)Must be estimated and included in the cash flows of the project
• C)Similar to sunk costs
• D)Should be ignored by the firm
• E)Similar to fixed costs

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Definitions:

Cournot Model

A economic model describing an industry structure in which companies compete on the quantity of output they decide to produce, assuming their rivals' decisions are fixed.

Bertrand Model

An economic model of competition among firms, where firms choose prices rather than quantities to compete.

Collude

The act of cooperating or conspiring, especially between competitors, to achieve a mutual benefit such as setting prices.

Bertrand Duopoly

An economic model describing interactions between two companies that compete by setting prices rather than the quantity of output.