d. Explain the relevance of opportunity cost for a travel firm in deciding how to use its resources. [6]
Answers
Answer:
Weighing opportunity costs allows the business to make the best possible decision. If, for instance, the company determines an alternative choice's opportunity cost is greater than what the company gains from its initial decision, the company can change its mind and pursue the alternative choice.
Opportunity cost is the return of a foregone option less than the return on your chosen option. Considering opportunity costs can guide you to more profitable decision-making. You must assess the relative risk of each option in addition to its potential returns.
By doing so, individuals are maximizing the amount that they can get out of their resources (time, money, effort, etc.). ... Opportunity costs are an important consideration for economists and business people, but are faced by individuals even when they are not making classically economic decisions.
Explanation:
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