Opportunity cost refers to the value of the next best alternative that is forgone when making a decision. It highlights the benefits that could have been gained from choosing a different option. For example, if a college student decides to spend their summer working at an internship instead of taking a vacation, the opportunity cost is the enjoyment and experiences they would have gained from traveling. This concept is crucial in making informed decisions in both personal and business contexts.
In 3-5 sentences, explain opportunity cost. What is a real world example of an opportunity cost?
1 answer