Question

Shifting from producing 500 scarves and 225 sweaters, to producing 100 scarves and 350 sweaters would

Answer 1

Answer:

C) result in an opportunity cost of 125 sweaters.

Explanation:

In business, opportunity cost is an economic lost that incurred when you choose a certain alternative over another choice.

Initially the company produced 500 Scarves and 225 sweaters.

Since the time and  material that company possess are limited, increasing the production of a certain product will most likely reduce the production of another product.

So, when the company choose to produce 125 more sweaters, it will create an opportunity cost that make the company only able to produce 100 scarves.