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Opportunity cost definition?

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User Yhozen
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Answer :opportunity cost is the next best alternative forgone in the production process

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User Henning Krause
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Answer: Opportunity cost is the loss of potential gain from other alternatives when one alternative is chosen.

Explanation: Here is some examples :)

(1) The opportunity cost of the funds tied up in the one's own business is the interest (or profits corrected for differences in risk) that could be earned on those funds in other ventures.

(2) The opportunity cost of the time one puts into his own business is the salary he could earn in other occupations (with a correction for the relative psychic income in the two occupations).

(3) The opportunity cost of using a machine to produce one product is the earnings that would be possible from other products.

I hope this helps!

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User Seok
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