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.

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?

A.
one-time expense of renovating restaurants

B.
ongoing expense of high-quality ingredients

C.
money that is expected to be provided by new adult customers

D.
money that could have been made from families with young children

Answer 1

D. money that could have been made from families with young children

Answer 2

The opportunity cost in the scenario above refers to the foregone benefits or potential profits that the fast-food chain will miss out on by rebranding itself as a mid-range adult café instead of a cheap kid-friendly restaurant. This means the answer is option D - the money that could have been made from families with young children. By removing the children's playgrounds and targeting a different customer segment, the fast-food chain is sacrificing the revenue it could have earned from families with young children.

Answer 3

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.

D. money that could have been made from families with young children

The opportunity cost in the scenario above would be option D: money that could have been made from families with young children.