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      Question

      The cost that has to be incurred by a firm to retain an

      input is _____of the input.
      A opportunity cost Correct Answer Incorrect Answer
      B sunk cost Correct Answer Incorrect Answer
      C explicit cost Correct Answer Incorrect Answer
      D marginal cost Correct Answer Incorrect Answer

      Solution

      The opportunity cost of using an input is the value of the next best alternative use of that input. To retain the input for its current use, the firm must forgo the benefit it could get from its next best alternative use, which is its opportunity cost.

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