Question

Explain the concept of opportunity cost​

Answer 1

Answer:

In explanation.

Explanation:

The concept of opportunity cost.

-Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. Understanding the potential missed opportunities foregone by choosing one investment over another allows for better decision-making.

-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.

KEY IDEAS.

-Opportunity cost is the forgone benefit that would have been derived by an option not chosen.

-To properly evaluate opportunity costs, the costs and benefits of every option available must be considered and weighed against the others.

-Considering the value of opportunity costs can guide individuals and organizations to more profitable decision-making.

Hope this helps.