Question

Suppose you have won a free ticket to see a Bruce Springsteen concert. This ticket has no resale value. Also suppose that U2 has a concert the same night. The U2 concert represents your next-best alternative activity to the Springsteen concert. Tickets to the U2 concert cost $62, and on any particular day, you would be willing to pay up to $134 to see U2. Assume that there are no additional costs of seeing either show. Based on the information, what is the opportunity cost of seeing Bruce Springsteen?

Answer 1

Answer: $72

Explanation:

Opportunity cost is the cost incurred or benefit foregone by selecting some other alternative which gives the some level of satisfaction.

It is totally depend upon the preferences of the consumers or individuals.

The opportunity cost of seeing Bruce Springsteen is $72(= $134 - $62) that is the difference between actual ticket price and willing to pay for U2 concert.