Past expenses are irrelevant to decisions to supply now, because
A.people forget the past quickly
B.it is esssential to avoid bankruptcy
C.supply decisions depend on opportunities thst will have to be forgone, not opportunities already forgone
D.expenses incurred in the past never affect the opportunities avaliable in the present
Which answer do you think is best?
I agree.
The correct answer is C. Supply decisions typically depend on future opportunities that will be missed out on, not on past opportunities that have already been missed.
To understand this better, let's break down each option and see why C is the most accurate choice:
A. This option suggests that people forget the past quickly. While it might be true in some cases, it does not provide a strong rationale for why past expenses are irrelevant to supply decisions. Forgetting the past quickly does not necessarily mean that past expenses have no impact on current decisions.
B. This option states that it is essential to avoid bankruptcy. While financial stability is important, it does not directly address the issue of why past expenses are irrelevant to supply decisions. It is possible to avoid bankruptcy by considering both past and future expenses.
C. This option correctly explains that supply decisions depend on future opportunities that will have to be forgone. When making supply decisions, businesses often consider the potential benefits and costs of alternative options. They weigh the expected future gains against the potential lost opportunities by opting for a particular supply decision.
D. This option claims that expenses incurred in the past never affect the opportunities available in the present. This is not entirely true, as some past expenses can have an impact on current decisions. For example, if a business has incurred significant debt or is tied to long-term contracts, these financial obligations can affect supply decisions in the present.
In summary, C is the most accurate choice because supply decisions are typically driven by future opportunities and what will be forgone by choosing one option over another.