Meaning of opportunity cost with the help of an example
3 Replies
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 18 March 2021
Opportunity. Cost = return from next best opportunity chosen - return from option chosen.
example, your doing a business of buying and selling plots. Best opportunity building will make you 3 lakhs Profit, but the building you purchased will give you 2 lakhs profit, and the opportunity cost lost is 1 lakh and vice versa
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 18 March 2021
When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can't spend the money on something else.
jay
(analyst)
(44 Points)
Replied 22 March 2021
Opportunity cost is the profit lost when one alternative is selected over another.It the next best alternative cost.
Example - Use your savings to go on a vacation or buy an asset from the same money.
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