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 six and nine of them. What is the opportunity loss for purchasing eight watermelons when the demand is for nine watermelons?
A) 0
B) 3
C) 4
D) 6

Question

Quizplus · Accepted Answer

The opportunity loss is the profit lost from not meeting the demand. If the manager buys eight watermelons and the demand is nine, he loses the profit from one watermelon, which is $7 (selling price) - $4 (cost price) = $3.

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