It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______, and discontinuation of shirt production is considered their __________.

The $15 spent to make each pair of jeans is a production cost because it is an expense directly involved in producing the jeans. Giving up shirt production means giving up the value the company could have earned from shirts, which is an opportunity cost. So the correct choice is “production cost; opportunity cost.”

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