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Opportunity costs: Their place in the theory and practice of production
Author(s) -
Jensen Oscar W.
Publication year - 1982
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090030110
Subject(s) - opportunity cost , production (economics) , economics , production theory , production cost , microeconomics , total cost , business , engineering , mechanical engineering
The concept of opportunity cost, or foregone opportunities, is central to the economists' discussion of full costs. In many of these discussions opportunity cost in exchange is emphasized, while the opportunity costs in production are not fully discussed and embellished. It is the purpose of this paper to expand upon the notion of opportunity cost in production and demonstrate that, under general conditions, the full costs of economic theory may often illuminate the alternatives of a management decision problem.