What are the costs of the opportunity?

The cost of the opportunity concerns what costs the company to produce goods or services in terms of what could be obtained by means of these same sources to produce different goods or services. The cost of the opportunity is basically a comparison of one production option with another production option. This includes determining the value received from one that goes with the production of one option versus what could be divided by a decision to go with another option using the same raw materials.

opportunities can be understood by thinking in terms of different products that can be made with the same basic materials. For example, corn is a common food commodity. Corn can be processed and sold in cans or prepared with a slightly different process and is sold in frozen packages. Alternatively, the corn could be grounded in food and wrapped in sealed bags. The seller would like to explore the relative benefits of the production of each type of product from the same commodity APORTADY associated with the selection of one line of production or opportunities over the other two.

When calculating the cost of real occasions, it is important to look at several aspects of the economy. First, with every production option, they relate to production costs. Secondly, there is a matter of storage costs, while the finished goods are waiting for sale. Finally, there is a lack of raw materials and what impact on the final and actual material costs. Although other factors are also paid, each economist will include these three factors in evaluating the output by selecting one type of production over another.

The cost of opportunity can apply to many different situations. The participating materials may include land, work, working capital or any kind of food commodity, including beef or fish. In general, the idea of ​​calculating the cost of providing the opportunity to provide the most effective use of MATThe editions so that the company returns the largest amount of profits from the company.

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