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Opportunity cost

Gail is contemplating a job offer with an advertising agency where she will make $50,000 in her first year of employment. Alternatively, Gail can begin to work in her father's business where she will earn an annual salary of $40,000. If Gail decides to work with her father, the opportunity cost would be:

A. $0
B. $40,000
C. $50,000
D. $90,000
E. irrelevant in deciding which job offer to accept

Solution Summary

The solution explains how to determine the opportunity cost.