Question

As the price of a good rises: A. firms earn larger profits. B. more firms can cover their opportunity costs of producing the good C. firms find they can raise price by even more. D. government regulation becomes more justified.

Answer 1

The correct answer is letter "B": more firms can cover their opportunity costs of producing the good.

Step-by-step explanation:

Opportunity cost can be defined as the return of a chosen investment option compared to the return of the options that were forgone. It represents the difference between the current option taken and the best next available option. The higher the price of the goods sold with the chosen option, the more the opportunity of producing that good is going to be covered.