What Is Opportunity Cost?
Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. Because opportunity costs are unseen by definition, they can be easily overlooked.
Understanding the potential missed opportunities when a business or individual chooses one investment over another allows for better decision-making.
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"There's no money in poetry, but then there's no poetry in money, either." ~ Robert Graves
Considering the value of opportunity costs can guide individuals and organizations to more profitable decision-making.
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Learn more about moneyandinvestments with this collection
The impact of opportunity cost on personal and professional life
Evaluating the benefits and drawbacks of different choices
Understanding the concept of opportunity cost
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Opportunity Cost
An opportunity cost is the potential ‘alternative’ or benefit that is forfeited when one chooses a particular option.
The other, foregone option, if it is lower than other companies, is the key factor in this trade-off.
Opportunity Cost
Saying 'yes' to something automatically means saying 'no' to other possibilities. This is known as Opportunity Cost. It translates into the potential benefits that we miss by choosing one option over another.
Subconsciously we are aware that we can't do everything we want ...
Opportunity Cost: You Can Do Anything but Not Everything
When mulling over multiple choices, the quality of any option cannot be assessed in isolation from its alternatives. The price you pay (or the sacrifice you make, or the benefits you give up) for doing what you’ve chosen to do instead of doing something else is the opportunity cost.
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