Question

which scenario is the best example of an opportunity cost?

a computer company issues a recall on its tablets.
a computer company produces fewer laptops to meet tablet demand.
a computer company reduces the price on last years models.
a computer company stops making computers with cd/dvd drives.

Explanation:

Define opportunity cost

Opportunity cost is the value of the next best alternative given up when making a choice.

Analyze the choices

• Option 1: A recall represents a corrective action and financial loss, not a trade-off between two choices.
• Option 2: Producing fewer laptops to make more tablets directly shows a trade-off where the foregone laptop production is the opportunity cost of meeting tablet demand.
• Option 3: Reducing prices is a pricing strategy to clear inventory.
• Option 4: Stopping production of obsolete technology is a product lifecycle decision, not a direct trade-off of resources between two active alternatives.

Identify the best example

Option 2 represents a clear trade-off where choosing one alternative (tablets) results in giving up another (laptops).

Answer:

• A computer company issues a recall on its tablets.
• A computer company produces fewer laptops to meet tablet demand. (Correct answer)
• A computer company reduces the price on last year's models.
• A computer company stops making computers with CD/DVD drives.