Provo Provolone Company is a purveyor of fine provolone cheese. Provo is considering adding a line of cheddar cheese, in addition to selling provolone. After conducting a differential analysis, Provo finds that the variable cost of producing $1,000$ pounds of cheddar is $$3,000$ and the differential revenue would be $$3,500,$ giving Provo $$500$ in additional profit.

What is the type of cost Provo will incur if it produces cheddar cheese instead of Muenster?

Relevant Cost

Opportunity Cost

Avoidable Cost

Irrelevant Cost