Question

when a firm chooses to produce smartphones instead of tablets because profits are higher, the opportunity cost is:
the tablets that were not produced
consumer demand
increased advertising
higher prices

Explanation:

Opportunity cost is the value of the next - best alternative forgone when a choice is made. In this case, the firm chose to produce smartphones instead of tablets. So the alternative that was given up (the tablets that could have been produced) is the opportunity cost. Consumer demand is about what consumers want, not related to the forgone alternative. Increased advertising is a cost - related to promoting products, not a forgone alternative. Higher prices are about the price level of products, not the forgone production.

Answer:

A. The tablets that were not produced