OPPORTUNITY COST Meaning and
Definition
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Opportunity cost refers to the potential benefit or value that must be given up when making a choice between two or more mutually exclusive alternatives. It represents the alternative use of resources that are foregone as a result of selecting a particular option.
In simpler terms, opportunity cost is the next-best alternative that is forfeited when a decision is made. It is the cost of choosing one option over another and the benefits that could have been obtained had the alternative option been chosen.
The concept of opportunity cost is often used in economics to analyze decision-making processes. It helps to assess the trade-offs and implications of a particular choice and the value that could have been gained if a different choice was made.
Opportunity cost can be measured in different ways, such as quantitatively in terms of monetary value or qualitatively in terms of the benefits or advantages that are sacrificed. It is important to consider both the tangible and intangible costs when evaluating opportunity cost.
The concept of opportunity cost is crucial in various economic theories, business decision-making, and personal finance. It provides a framework for assessing the potential gains and losses associated with different alternatives, enabling individuals, organizations, and policymakers to make informed choices based on the relative value of the options available.
Common Misspellings for OPPORTUNITY COST
- ipportunity cost
- kpportunity cost
- lpportunity cost
- ppportunity cost
- 0pportunity cost
- 9pportunity cost
- ooportunity cost
- olportunity cost
- o-portunity cost
- o0portunity cost
- opoortunity cost
- oplortunity cost
- op-ortunity cost
- op0ortunity cost
- oppirtunity cost
- oppkrtunity cost
- opplrtunity cost
- oppprtunity cost
- opp0rtunity cost
Etymology of OPPORTUNITY COST
The term "opportunity cost" is derived from the field of economics, specifically from the broader concept of "cost". The word "opportunity" refers to a favorable situation or a chance to achieve something, while "cost" typically implies the sacrifice or foregone benefit associated with a particular decision or choice. The concept of opportunity cost, as a distinct concept, emerged in the early 20th century with the development of economic theory and gained prominence through the works of economists such as Friedrich von Wieser and Henry Hazlitt.
Similar spelling words for OPPORTUNITY COST
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