Answer to Question #146557 in Microeconomics for Mughal shoaib

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 (3 marks)

Answer 1

Opportunity cost is the value of the next best alternative when a decision is taken. It is the lack of other options as one option is preferred, alternative is the keyword which is often synonymous with opportunity costs. Opportunity costs play a huge role in our life and particularly manufacturers. It allows a producer to decide whether to manufacture or not. Helps in determining the gains which can be reaped from going to produce by contrasting it with the alternative of not producing at all. Opportunity costs allow companies to make the right possible decision. It reflects the possible opportunities that can be lost out by selecting another option. And this all has played a role in the massive growth of the frozen food industry, when the manufacturers have used and measured opportunity costs and chosen the right decision and alternatives. Without opportunity costs, not only the frozen food market, but any firm cannot be effective.