Mr Idowu needs a television and a refrigerator. Each cost N500.00, the exact amount he has . If Mr. Idowu buys the television , the refrigerator would be re...

Mr Idowu needs a television and a refrigerator. Each cost N500.00, the exact amount he has . If Mr. Idowu buys the television , the refrigerator would be regarded as the

Answer Details

If Mr. Idowu buys the television, he would have no money left to buy the refrigerator. Therefore, the cost of the refrigerator is the opportunity cost of buying the television. In other words, the opportunity cost is the value of the next best alternative that has to be forgone in order to pursue a certain action or decision.