Question

A fast-food chain makes the decision to rebrand itself as a mid-range adult café instead of a cheap kid-friendly restaurant. This change will involve using higher-quality ingredients and renovating to remove children’s playgrounds.

Use the passage to answer the question.

What is the opportunity cost in the scenario above?

(1 point)

one-time expense of renovating restaurants


ongoing expense of high-quality ingredients


money that is expected to be provided by new adult customers


money that could have been made from families with young children

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Answer 1

money that could have been made from families with young children

Explanation: opportunity cost is the value of the next-best alternative given up — here the revenue lost from serving families with young children.