Question

A business must decide whether to open a new office in China. If it opens the

branch, it will increase its chances of selling a high volume of its products in
China. On the other hand, the business will have to spend a lot of money to
make the branch operational.
What would be an opportunity cost for the business if it chooses to open the
new branch in China?
A. The business could not use the money it spends on the new
branch for something else.
B. The business would be able to increase the selling prices for most
of its products.
C. The business would have to spend all its money making new
Chinese products.
D. The business would be able to easily sell its products to many new
customers.

Answer 1

Answer: A. The business could not use the money it spends on the new

branch for something else.

Step-by-step explanation:

Opportunity cost simply means the cost of what one forgoes when an alternative decision is taken.

Since the business chooses to open a new branch in China, the opportunity cost will be the money that the business could have spent on something else.

Therefore, the correct option is A.