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05-02-2020
Business

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The Stogie Shop, a cigar store in the mall, sells handminus−rolled cigars for $10.00 and machineminus−made cigars for $2.50 each. What is the opportunity cost of buying a handminus−rolled cigar?

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06-02-2020

Answer:

4 machineminus−made cigars

Explanation:

Opoortunty cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

If one buys a handminus−rolled cigars for $10.00, he forgoes the opportunity of buying $10 / $2.5 = 4 machineminus−made cigars.

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