Practicing Success
Practicing Success
CUET Preparation Today
What do you understand by the term “Opportunity cost”? |
Extra cost for buying one additional unit of commodity Cost which has already been issued in past due to wrong investment decision Mental cost borne in terms of discomfort and pain while paying for factor services Cost which we forgo, while making a choice or a decision |
Cost which we forgo, while making a choice or a decision |
Opportunity cost refers to the value which we forgo while taking a decision. For example: Kanica decides to skip the marriage so that she can study for her economics class test. Thus, when she took the decision of not going to the marriage, it becomes her opportunity cost. Another example can be - Raju has 10,00,000 in his hand and has a choice whether he can invest that money in mutual funds or can use it in his wedding. Now, whatever the decision he takes, the 2nd best alternative value will be his opportunity cost. |
