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(a) Opportunity cost -It is the cost on exploring and accepting an opportunity by rejecting another alternate opportunity.It is the benefit forgone or lost by rejecting a particular competing alternative to another competing alternate choice.The benefits which might accrue from the alternative may be regarded as the opportunity cost of choosing a particular course.

For example a business has an owned building f rent 10000 dollars per month if it is let out.If the business is using the building for expanding its own activities it has to forego the benefit of 120000(1000*12)per annum. This amount is the opportunity cost of the expansion plan.

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