Oportunity Cost

Opportunity cost

The opportunity that changed a life, each day I visit my grandmother and noticed that many people had visited her daily. I spoke with some of the visitors and question their visit. I learned from the interview that the visitors come from all over to get a slice of grandmamma pecan pie. I also talk with grandmamma about how big the crowed for their slice of pecan pie, she also mentioned that the pies was given away free. Then and there I saw an opportunity to market grand mama's pies. With that in mind the brainstorming began. PRODUCTION possibility Before producing the pecan pies, I reviewed the cost of production. To produce the pecan pies it would cost $25.00, to produce ten pecan pies in one hour. POSSIBILITY CURVE It shows the maximum amount of pecan pies that I can produce. There is clearly a limit to this at any one time just like there is a limit to how much water that you can drink in a day. This possibility curve can give the maximum amount of pecan pies we can produce if all my resources are devoted to producing the pies which gives us a point on the vertical axis; then we do the same for the case for the cost horizontal axis. Then we join the two positions with a straight-line. Once we have drawn the line, we do not have to have all pecan pies or all the cost. Any point on it represents a mix of the two goods that people wish to buy. At the point people are willing to pay for the pies. It always arises with budget allocations. This method measures budget and monies for different purpose to market the pecan pies.