Question

A busy small business owner is considering purchasing groceries through a premium home delivery service because of its convenience the service provides the best groceries and cost significantly more than buying groceries in the store but home delivery is an attractive feature examine the opportunity cost in trade-offs of the small business owner choosing to my groceries through the premium home delivery service compare your findings with the opportunity cost and trade-offs if small business owner word to choose buying groceries in the store instead

Answer 1

The opportunity cost related to choosing to purchase through a premium home delivery service will be the higher cost than buying the groceries at the store.

And if the small business owner chooses to buy groceries at the store instead of choosing the home delivery service, the opportunity cost will be related to the convenience and speed of the service.

Compensation cost

The concept encompasses the various costs of a business' activities and how their characteristics can impact the entire cost of the production chain.

Therefore, opportunity cost is different from accounting cost, and is related to measuring the cost of what is left undone when it is necessary to make a certain choice.

Find out more information about opportunity cost here:

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Answer 2

The opportunity cost of buying from the home delivery service is the fact that the business owner would pay more than he would have paid if he went to the store.

The existing trade-off here

The trade off that exists here is between convenience and the extra amount that he would be paying by not going to the store.

If he chooses to go to the store, he is going to inconvenience himself and would lose the attractive features from the home delivery.

If he stays home and require the home delivery service, the business owner would be paying more than he would have paid at the store.

Read more on trade-offs here:

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