The Opportunity Cost of Making a Component Part in a Factory

question 26

Multiple Choice

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

• A) variable manufacturing cost of the component.
• B) fixed manufacturing cost of the component.
• C) total manufacturing cost of the component.
• D) net benefit foregone from the best alternative use of the capacity requireD.
• Opportunity costs and benefits are all about amounts foregone.

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Definitions:

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