But what if the space now being used to produce shifters could be used for some other purpose? In that case, the space would have an opportunity cost equal to the segment margin that could be derived from the best alternative use of the space.To illustrate, assume that the space now being used to produce shifters could be used to produce a new cross-country bike that would generate a segment margin of $60,000 per year. Under these conditions, Mountain Goat Cycles should accept the supplier’s offer and use the available space to produce the new product line:
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