Answer to Question #146366 in Microeconomics for shahzaib

Question

in past 50 years the frozen food industry in U.S has grown from $1billion to $27 billion. Discuss the role of opportunity cost in our lives with regards to this huge growth in the frozen food market in the U.S

Answer 1

Opportunity cost is the value of the next best alternative when a decision is made. It is the loss of other alternatives when one alternative is chosen, alternative is the keyword which is always associated with opportunity costs. Opportunity costs play a huge role in our life and especially manufacturers. It helps a producer to determine whether to produce or not. Helps in assessing the benefits which can be reaped by going to produce by comparing it with the option of not producing at all. Opportunity costs allow firms to make the best possible decision. It represents the potential benefits that can be missed out by choosing another alternative. And this all has played a part in the huge growth of the frozen food market, as the producers have used and analyzed opportunity costs and selected the best decision and alternatives. Without opportunity costs, not only the frozen food market, but any firm cannot be successful.