In a situation where the firm is at point D and an increase the production of bike tires by 300 units, the opportunity cost will be 200 truck tires.
When the firm is at point B and decides to increase the production of truck tires by 400 units, in this case, the opportunity cost will be 500 bike tires.
Opportunity cost simply means the potential benefit that an economic entity loses when it engages in another activity.
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