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Which of the following is an explanation of opportunity cost? A) Identifying business opportunities and bringing together resources to meet them B) Seeing a problem with the way things are done and thinking of a better way of doing it C) Seeing a gap in the market and calculating the cost of entering the market D) The cost of making one choice concerning the use of limited resources at the expense of an alternative choice - AQA - GCSE Business - Question 3 - 2020 - Paper 1
Question 3
Which of the following is an explanation of opportunity cost? A) Identifying business opportunities and bringing together resources to meet them B) Seeing a proble... show full transcript
Worked Solution & Example Answer:Which of the following is an explanation of opportunity cost? A) Identifying business opportunities and bringing together resources to meet them B) Seeing a problem with the way things are done and thinking of a better way of doing it C) Seeing a gap in the market and calculating the cost of entering the market D) The cost of making one choice concerning the use of limited resources at the expense of an alternative choice - AQA - GCSE Business - Question 3 - 2020 - Paper 1
Step 1
D) The cost of making one choice concerning the use of limited resources at the expense of an alternative choice
Answer
Opportunity cost refers to the loss of potential gain from other alternatives when one alternative is chosen. In this case, choosing to allocate resources to one option incurs a cost, which is the value of the next best alternative that is forgone. Thus, option D accurately describes the concept of opportunity cost.