Which statements demonstrate the meaning of opportunity cost for producers and consumers? check all that apply. if producers can only produce one item, they must decide which item to produce based on profit. consumers are limited by their resources, and must give up the chance to purchase one item in order to buy another. consumers and producers are not limited by scarcity of resources or time. when deciding to produce or purchase one item, another opportunity must be given up. the only factor influencing opportunity cost is personal opinion?

Answer and Explanation

A producer is someone who produces goods and offers services to customers who are the consumers  and he does this  by combining labor and capital in terms of cash so that he/she can come out  with those goods and services as output. while consumers are those who generate their money either through salaries and pay for goods and services to consume them. They play a big role in any economy.

i) If producers can only produce one item, they must decide which item to produce based on profit- On this matter the producer has to come up with a decision based on the goods which are fast moving and that will generate a good profit.

ii) Consumers are limited by their resources, and must give up the chance to purchase one item in order to buy another-some times consumers might be in need of several goods but the resources they have cannot meet their needs. so by this they end up  giving up on one and buy the most important first then the other one later or in future.

iii) When deciding to produce or purchase one item, another opportunity must be given up- In production you have to consider the demand and then see how much you can afford in your production. so where the demand is high you produce those goods first.

There is opportunity cost for all items. The statements that demonstrate the meaning of opportunity cost for producers and consumers are;

Due to consumers' resources such as time, attention, etc., are limited, Consumers have to choose the best way to allocate them and they do this by making tradeoffs.

The opportunity cost of a choice is known to be the amount or value of the best alternative that was forgone.

Conclusively, producers often decides which product to produce and consumers decides which purchase to make be it one item at a time. Here, in both scenarios above, opportunity cost must be given up.

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