Question

If a firm buys a delivery van for $18,000 and can resell it in 2 years for $7,500, the opportunity cost of using the van is

Answer 1

The opportunity cost of using the van is $7,500.

Step-by-step explanation:

It is given that a firm buys a delivery van for $18,000 and can resell it in 2 years for $7,500.

Opportunity cost : It is the value or cost of second best alternate when one is chosen. It is also known as sacrificing cost.

He sell the van for $7,500. It means if the van is not sold, then firm don't have $7,500. The firm gets $7,500 for van.

Therefore, the opportunity cost of using the van is $7,500.