Assume the demand for shirts is P = 30 – Q, and the cost per shirt is $10. Now assume that there the firm incurs an opportunity cost when it sells a shirt instead of a hat. The optimal quantity of shirts to produce will be:Assume the demand for shirts is P = 30 – Q, and the cost per shirt is $10. Now assume that there the firm incurs an opportunity cost when it sells a shirt instead of a hat. The optimal quantity of shirts to produce will be:

less than 10

Explanation:

demand for shirts = P = 30 - Q

q = quantity of shirts

p = unit cost price of shirts

p =

q = $10

but optimal quantity of shirt produced after incurring opportunity cost will be

q ≤ 10

because MR = MC

and q = 10

opportunity cost causes the increase of MC( optimal quantity ) towards the lower q

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.