Question

John's dairy makes and sells homemade ice cream. He uses a machine he bought 15 years ago for $1,500. The machine still works but is so old that nobody else would be willing to buy it, as they would prefer buying a new one that would last longer. John's opportunity cost of continuing to use this machine is

Answer 1

The opportunity cost of John continuing to use the old ice cream machine is the potential earnings he could have made with a new machine.

Step-by-step explanation:

The opportunity cost of using the old, outdated ice cream machine is the potential earnings that John could have made if he invested in a new machine. Since the old machine is still functional but no longer desirable on the market, its value is essentially zero. If John continues to use this machine, he is missing out on the opportunity to make more profit with a newer and more efficient one.

Answer 2

Answer: zero

Step-by-step explanation:

Opportunity cost is simply defined as what an individual forgoes when he or she is confronted with choices to make and makes a particular economic decision.

In this scenario, since we are told that nobody else would be willing to buy the machine, as they would prefer buying a new one that would last longer. It implies that John's opportunity cost of continuing to use this machine is zero since he has nothing to lose.