Answer:
B. A business gives its employees a raise, so it cannot afford to buy any TV ads.
Explanation:
Opportunity cost also known as the alternative forgone, can be defined as the value, profit or benefits given up by an individual or organization in order to choose or acquire something deemed significant at the time.
Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available.
For instance, if you decide to invest resources such as money in a paying your employees (workers), your opportunity cost would be the benefits like increased sales you could have earned if you had invested the same amount of resources in advertising your business.
Hence, the situation which best illustrates the economic concept of opportunity is when, a business gives its employees a raise, so it cannot afford to buy any TV ads.
C- A business takes out a large loan, so it is able to expand into a new market is a perfect example of the term opportunity cost in the economy termed world.
A business loan taken will help the expansion into a bigger firm. However if the firm would have not have been able to scale its business. This cost born by the business is known is known as opportunity cost.
An opportunity cost is referred to as foregone expenses by the firm and the deployment of same money by the firm into another venture for a purpose whether predefined or not.The opportunity cost also in layman's terms refers to if you would have deployed your money here instead of there, you would have gained this much.A firm could have used this loan to deploy it in the field of manufacturing additional units the firm could have increased resulting in increased profit for them.Hence, the correct option is C that the business taking loan to expand into a new market is an example of opportunity cost.
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