Question

An opportunity cost is ________.

the cost incurred to gain the opportunity to make a sale

the benefit gained by choosing a certain course of action

the benefit given up by choosing an alternative course of action

costs that have been incurred in the past

Answer 1

An Opportunity Cost is the benefit given up by choosing an alternative use of course of action costs that have incurred in the past.

The explanation:

For this when assessing the potential profitability of various investments business usually look forward with that option which gives the greatest return.By this the business will also look at the opportunity of each option.For investment purposes in a business a amount is usually set as investment but the business must choose between investing funds or purchasing a new equipment.However whatever the option is choosen the potential profit is that it gives up by not investing in the other option which is the opportunity cost.