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Semenov [28]
3 years ago
10

You received 50 as a birthday grift and choose to spend it on a new wallapaper for your room the opportunity cost of this decisi

on is
History
1 answer:
lyudmila [28]3 years ago
7 0

Answer:

The other items you could have purchased with your $50

Explanation:

Opportunity cost represent the loss of potential benefit that occurs when you choose an alternative decision. This concept is usually used by businesses during their budget allocation process in order to find out the best way how to spend their capital.

On the example above, You receive $50 as a birthday gift. That $50 can be used for anything. You can choose to use it to purchase games, clothing, foods, etc. But you decided to spent it on wallpaper. By purchasing the ability you lose the opportunity to buy any of those other things. This loss is what considered as opportunity cost.

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