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decreasing marginal opportunity cost

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Give an example of decreasing marginal opportunity cost, and explain.

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Solution Summary

The opportunity costs or alternative costs are explored in the solution.

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The opportunity cost or alternative costs are the returns from the second best use of the organization's resources or here in this case the individual's capability.

For example a farmer who is producing rice can also produce peas with the same factors.

Therefore the opportunity cost of a quintal of rice is the amount of output of peas given up.

Therefore it should be remembered that
? All decisions involve choice must involve opportunity cost calculation.
? The opportunity cost may be either real or monetary, either implicit or explicit, either quantifiable or non ...

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