Production of Cricket Bats (in thousand) | 0 | 1 | 2 | 3 | 4 | 5 |
Production of Sarees (in lakh) | 75 | 70 | 62 | 50 | 30 | 0 |
If the production of cricket bat is increased from 3 thousand to 4 thousand, the opportunity cost that economy has to bear will be 20 lakh sarees(50-30 lakh sarees) since it has to be sacrificed in order to produce more of cricket bats with limited resources and technology given.Opportunity cost of production of a commodity refers to the cost which the producer has to sacrifice in terms of the next best alternative use. Therefore, the sacrifice which is made to produce 4 thousand bats from3 thousand to four thousand thousand is 20 lakh sarees.