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 nine watermelons when the demand is for seven watermelons?
A) 0
B) 4
C) 8
D) 12

Question

Quizplus · Accepted Answer

The opportunity loss is calculated as the cost of unsold watermelons. If nine are purchased and only seven are sold, two 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