Question

The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is:

Answer 1

Answer:

Zero

Explanation:

Opportunity costs can be regarded as the potential benefits that is been missed out by an investor, business or

individual, when they are choosing one alternative over other alternatives.

When a company understand potential missed opportunities as a result of

choosing one investment over another , it helps them in better decision-making. For instance, opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is zero, this so as a result of the case that there is no alternative here, and there was no miss out of benefits from any alternative.