What Is Opportunity Cost & How to Calculate It?

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Opportunity cost is the potential benefit of an alternative opportunity that must be sacrificed when choosing a specific action. In other words, opportunity cost measures the cost of giving up one opportunity to take another.

For example, if you want to buy a new car, you need to give up your old car and cannot do both at the same time. This means that buying a new car comes with an opportunity cost.

The old car is a perfect example of the opportunity cost in this case. There are many other examples of opportunity costs in our lives – for example, studying instead of getting a job has an opportunity cost because it means foregoing income from work and focusing on learning instead.

If you’re reading this article, chances are that you’re searching for ways to calculate opportunity cost easily. Keep reading to find out more about this topic!