Final answer:
Paying closer attention to opportunity costs can lead to higher profits for a company.
Step-by-step explanation:
Opportunity costs refer to the value of the next best alternative that is forgone when a decision is made. When a company pays closer attention to its opportunity costs, it means that they are considering the potential benefits they could have gained by choosing an alternative option. By doing so, the company can make more informed decisions and allocate its resources more efficiently, which can lead to higher profits. For example, let's say a company is deciding between two investment opportunities. Option A has a potential profit of $10,000, while option B has a potential profit of $8,000. The company chooses option A and earns $10,000 in profits. However, if they had considered the opportunity cost of choosing option B, they would have realized that they could have earned an additional $2,000. By paying closer attention to opportunity costs, the company can make decisions that maximize their profits. In summary, by considering opportunity costs, a company can make more informed decisions and allocate its resources efficiently, which can ultimately result in higher profits.