Answer (D) is correct . An opportunity cost is the maximum benefit forgone by using a scarce resource for a given purpose. It is the benefit provided by the next best use of that resource. Thus, in a factory operating at full capacity, the opportunity cost of making a component is the benefit given up by not selecting an alternative use of the plant capacity.
Answer (A) is incorrect because An opportunity cost is the benefit derived from the next best use of the resource, not an out-of-pocket cost.
Answer (B) is incorrect because An opportunity cost is the benefit derived from the next best use of the resource, not an out-of-pocket cost.
Answer (C) is incorrect because An opportunity cost is the benefit forgone, not the cost.
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