Question

When the producer of a good or service has a lower opportunity cost than other producers, that producer has an advantage in the market because:

Answer 1

When the producer of a good or service has a lower opportunity cost than other producers, that producer has an advantage in the market because: He or She will be able to sell at a lower price than other producers.

• Opportunity costs are the possible advantages that a person, investor, or company forgoes while deciding between two options. Opportunity costs are by definition invisible, making it simple to ignore them.
• According to microeconomic theory, an activity's opportunity cost is the value or advantage that would be lost if that activity were chosen instead of a different one that would provide a higher return on investment.
• The opportunity cost is the amount of time spent learning and the money that could be used elsewhere. When a farmer decides to grow wheat, there is an opportunity cost associated with not doing so or using the resources in another way (land and farm equipment). Instead of driving, a commuter takes the train to work.

Thus this is the answer.

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