Question

It is better for businesses to have opportunity costs, as it often gives them a comparative advantage.

Answer 1

The correct answer is lower.

Hope this helps!

P.S. I want to be the Brainy

Answer 2

The correct answer is Lower.

Opportunity cost is a microeconomic concept that is intended to measure the losses that a production choice entails. For example, the opportunity cost of opening a chocolate factory is what could have been done with the capital employed in the factory. It could have been applied in the financial market, or in any other productive activity. Realize that opportunity cost is a relative measure.

The concept of comparative advantage is used when the production of good is relatively more efficient than the production of another good. That is, comparative advantage is analyzed from the opportunity cost perspective!

A production decision is made rationally. In this way, if a company was opened, it means that money was employed in the best possible way, that is, the opportunity cost was lower. And the opportunity cost was lower because the company has a comparative advantage over other activities that could have been practiced with the money invested in the firm.