Final answer:
The inclusion of opportunity costs in business decision making is influenced by the need to make choices due to scarcity and trade-offs. Entrepreneurs use cost/benefit analysis to weigh the potential sacrifices and gains, evaluating the next best alternative forgone to make the most profitable decisions.
Step-by-step explanation:
The factors that influence the inclusion of opportunity costs in business decision making are rooted in the concepts of scarcity, choice, and trade-offs. Entrepreneurship plays a significant role in these decisions, as entrepreneurs must determine which production factors to utilize when resources are limited.
Moreover, the principle of opportunity cost is integral to these considerations, as it represents the value of the next best alternative that is given up in order to pursue a specific action or decision.
For instance, when thinking about costs and benefits, a business may conduct a cost/benefit analysis to compare the sacrifices and gains associated with a particular decision.
This analysis often involves weighing marginal costs against marginal benefits, providing a thorough overview of the potential impacts a decision may have on a firm's profits and operations.