Question

Which of the following is true about an opportunity cost? Multiple Choice they are recorded in the accounting records of the company. is a cost that has already been incurred and can not be changed by any decision. is the potential benefit given up when one alternative is selected over another. should never be considered in decision-making.

Answer 1

potential benefit given up when one alternative

Step-by-step explanation:

1. Implicit cost or opportunity cost : Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives. It is used in calculating economic profit

for example, if you start your business and earn 100,000 but you have to leave your job where you earn 10,000. opportunity cost is 10,000