Question

Matthew is a computer analyst who earned​ $200,000 in 2016. At the beginning of​ 2017, Matthew wanted to pursue a new career so he quit his job and opened a bakery. In his first​ year, he made total revenue of​ $50,000. The information on the right gives details of​ Matthew's first year in the bakery business. What is​ Matthew's opportunity cost of​ production?

Answer 1

Answer:

Matthew's opportunity cost of​ production is $200000.

Explanation:

An opportunity cost is the earning from the best alternative available.

Matthew was working as a computer analyst where his salary was $200000 which is his best alternative this means that the opportunity cost of the opening bakery for Mathew is $200000.

Therefore, Matthew's opportunity cost of​ production is $200000.