Questions:
Analyze Cost and Role in Decision Making
Analyzing Cost and Its Role in Decision Making
The concept of opportunity cost and examination of how to calculate the cost of alternatives over single and multiple time periods. Analyze cost and its role in the decision-making process by answering the following questions:
1. Citing examples, differentiate between opportunity cost, marginal cost, and relevant cost.
2. Assess the relationship of marginal benefit and marginal costs. How is marginal benefit measured, and how does it relate to marginal costs?
3. What other factors must managers address before making decisions? Why?