An opportunity cost is:
A)a cost which may be saved by not adopting an alternative.
B)the difference in total costs which results from selecting one alternative instead of another.
C)a cost which may be shifted to the future with little or no effect on current operations.
D)the potential benefit forgone by selecting one alternative instead of another.

Question

Quizplus · Accepted Answer

An opportunity cost refers to the potential benefit that is forgone by selecting one alternative over another. It is the cost of the next best alternative foregone. Therefore, the best choice is option D which perfectly defines opportunity cost. The other options do not accurately define what an opportunity cost is.

An Opportunity Cost Is