Question 8
Basic ConceptsThe concept of opportunity cost is important to the firm because it
- A.determines the prices of the firm's products
- B.increases the level of output of the firm
- C.leads to maximum satisfaction of the consumers
- D.guides firms in allocating scarce resources
Show the answer and explanation
Answer: D (guides firms in allocating scarce resources)
Explanation
Comparing the alternatives given up helps a firm decide how best to use its limited resources.