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Sagot :
Consider the opportunity cost of lost sales in the incremental analysis.
What is opportunity cost?
The opportunity cost of a specific activity option in microeconomic theory is the loss of value or benefit that would be experienced by engaging in that activity, as opposed to engaging in an alternative activity that offers a higher return in value or benefit.
The value of the next best alternative or option is referred to as the opportunity cost. This value may or may not be monetary. Value can also be measured using other criteria such as time or satisfaction. One formula for calculating opportunity costs may be the ratio of what you give up to what you receive.
The growing opportunity cost law: As the production of one good increases, so does the opportunity cost of producing the extra good.
To know more about opportunity cost follow the link:
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