The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Since this seedless watermelon costs $4, will sell for $7, and is highly perishable, he only expects to sell between 6 and 9 of them. What is the opportunity loss for purchasing 9 watermelons when the demand is for 7 watermelons?
A) 0
B) 4
C) 8
D) 12

Question

Quizplus · Accepted Answer

The opportunity loss is the cost of unsold watermelons. If 9 are purchased and only 7 are sold, 2 remain unsold. Each unsold watermelon costs $4, resulting in an opportunity loss of 2 x $4 = $8.

The Manager of Paul's Fruit and Vegetable Store Is Considering