As the price of a good rises: A. firms earn larger profits. B. more firms can cover their opportunity costs of producing the good C. firms find they can raise price by even more. D. government regulation becomes more justified.

Question

Frank Sampson

Business

15 April, 05:34

As the price of a good rises: A. firms earn larger profits. B. more firms can cover their opportunity costs of producing the good C. firms find they can raise price by even more. D. government regulation becomes more justified.

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Answers (1)

Know the Answer?

Landyn Liu · Answer 1

The correct answer is letter "B": more firms can cover their opportunity costs of producing the good.

Explanation:

Opportunity cost can be defined as the return of a chosen investment option compared to the return of the options that were forgone. It represents the difference between the current option taken and the best next available option. The higher the price of the goods sold with the chosen option, the more the opportunity of producing that good is going to be covered.