Longview Baskets has in its inventory 2500 damaged baskets that cost $20,000 The baskets can be sold in their present condition for $17,000, or repaired at a cost of $18,000 and sold for $36,000. What is the opportunity cost of selling the baskets in their present condition?
A)$37,000
B)$35,000
C)$54,000
D)$18,000

Question

Quizplus · Accepted Answer

The opportunity cost is the potential gain lost by choosing one alternative over another. If the baskets are repaired and sold, the net gain would be $36,000 - $18,000 = $18,000. Therefore, the opportunity cost of selling them in their present condition is $18,000.

Longview Baskets Has in Its Inventory 2500 Damaged Baskets That