Q1. What is opportunity cost? Explain with the help of numerical exampe.
Answers
Answered by
7
Heya...
Opportunity cost is the total loss of shifting from one resource to other resource....
Or....
It is the value of a factor in it's next best alternative use....
Example...
Current income of Mr X is 15000rs....
Now he want to shift on 20000rs income...
If he shift the total loss or opportunity cost will be 1st income ...that is 15000....
Opportunity cost is the total loss of shifting from one resource to other resource....
Or....
It is the value of a factor in it's next best alternative use....
Example...
Current income of Mr X is 15000rs....
Now he want to shift on 20000rs income...
If he shift the total loss or opportunity cost will be 1st income ...that is 15000....
Answered by
1
Cost Of next best alternate is termed as Oppurtunity Cost.
For example in a field, Income by way of producing wheat is Rs,1,00,000
In the same land, when cotton is produced , Income is Rs,90,000
So, here in this example, Oppurtunity Cost is Rs.90,000
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