problem of choice is unavoidable in the ordinary business of life. how?
Answers
Choice is the situation in which a decision has to be made among two objects, situations, decisions, paths, etc.
In this situation by choosing one, the other one is lost.
This created the situation of opportunity cost, shared in business life.
Opportunity cost is the situation, that choosing the next best alternative forgone.
How come choice is unavoidable in ordinary business life. This is due to the following resources:-
1- There are limited resources to produce a limited set of output using limited raw material, so businessman has to choose one thing to produce. For example which Rs 10,000 either stuffed toys can be made or toy cars, then a businessman must see that what should he produce by forgoing the other option.
2- In business, customers are also very important. So customers must choose what to purchase from their limited purchasing power, they can either buy a burger costing Rs.100 or a pizza costing Rs.100, so in the limited pocket money of Rs.120 they are only able to purchase one good.