Question

Tickets to a sold-out basketball game originally cost $50 each and cannot be returned. I bought one and now scalpers are willing to pay $125 for the ticket. The cost that should be considered if I am deciding whether or not to go to the game is ________.a. 0b. $50c. $75d. $125e. $175

Answer 1

Answer: $125

Explanation: The given case relates to the concept of opportunity cost. Opportunity cost refers to the cost of choosing one alternative over other. In other words,The amount of profit an individual looses while choosing best option over the second best option is called the opportunity cost.

In the given case, the individual chooses to go to the match then he will loose a revenue of $125 and if he chooses to sell he will earn an accounting profit of $75. But the opportunity concept is a a constituent of economic profit.

Therefore the correct option is D.