What is meant by increasing opportunity costs? The opportunity cost of an additional unit of a product, in terms of the lost output of another product, increases as more of the product is produced. The opportunity cost of an additional unit of a product, in terms of the lost output of another product, is unchanged as more of the product is produced. costs occur when resources are completely adaptable to alternative uses.

An allergy products superstore buys 6000 of their most popular model of air filters each year. the price of the air filters is $18. the cost of ordering and receiving shipments is $12 per order. accounting estimates annual carrying costs are 20% of the price. the supplier lead time is 2 days. the store operates 240 days per year. each order is received from the supplier in a single delivery. there are no quantity discounts. what is the store’s minimum total annual cost of placing orders & carrying inventory?