PRINCIPLE of Opportunity Cost

As long as resources are scarce, an increase in the production of a good, which necessarily results in a decrease in the production of other goods, means that the production of a good is subject to increasing opportunity cost.

Prices are a measure of opportunity cost because they provide information about the value of one good relative to another.

As long as resources are scarce, an increase in the production of a good, which necessarily results in a decrease in the production of other goods, means that the production of a good is subject to increasing opportunity cost.