Question

The difference in costs between two alternatives is called a(n) __________ cost.

- sunk
- common
- differential
- opportunity

Answer 1

The difference in costs between two alternatives is called a differential cost.

Step-by-step explanation:

The difference in costs between two alternatives is called a(n) differential cost. Differential costs are unique to each alternative and represent the additional costs incurred by choosing one alternative over another.

For example, if you have to choose between two job offers, the difference in salary and benefits between the two would be the differential cost. Another example is when deciding between two products, the difference in price would be the differential cost.

Therefore, the correct answer to your question is differential cost.