If the total cost of alternative A is $50,000 and the total cost of alternative B is $34,000, then $16,000 is termed the:
A) opportunity cost.
B) average cost.
C) sunk cost.
D) out-of-pocket cost.
E) differential cost.

Question

Quizplus · Accepted Answer

The $16,000 represents the differential cost, which is the difference in total costs between two alternatives. In this case, it's the difference between the total cost of alternative A and the total cost of alternative B.

If the Total Cost of Alternative a Is $50,000 and the Total