-
The opportunity cost of a factor of production is
-
- what it is earning in its present use.
- what it can earn in the long period.
- what has to be paid to retain it in its present use.
- what it can earn in some other use.
- what it is earning in its present use.
Correct Option: D
The opportunity cost of a choice is the value of the best alternative forgone, in a situation in which a choice needs to be made between several mutually exclusive alternatives given limited resources. It is equivalent to what a factor could earn for the firm in alternative uses.
