Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The total amount of money spent on the new venture
B
The potential profit lost from alternative investments not chosen
C
The expenses incurred during the startup phase
D
The financial gains expected from the business venture
Understanding the Answer
Let's break down why this is correct
Answer
Opportunity cost is the value of what you give up when you choose one option over another. When deciding to invest in a new business venture, it’s important to consider what else you could do with that money and time. For example, if you invest $10,000 in a new restaurant, the opportunity cost could be the salary you would have earned if you had kept your job instead. Understanding opportunity cost helps you see the true cost of your decision, not just the money spent, but also the benefits you miss out on. This way, you can make a more informed choice about whether the investment is worth it.
Detailed Explanation
Opportunity cost is what you give up when you choose one option over another. Other options are incorrect because Some might think opportunity cost is just the money spent; This option focuses on startup expenses, which are just costs.
Key Concepts
opportunity cost
cost-benefit analysis
Topic
Opportunity Cost in Profit Calculation
Difficulty
medium level question
Cognitive Level
understand
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