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

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16 May, 09:39

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

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Mercedes · Answer 1

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

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.