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Simple English definitions for legal terms
opportunity cost
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A quick definition of opportunity cost:
Opportunity cost: The cost of choosing one thing over another. It's like when you have two options, but you can only pick one. The opportunity cost is the value of the thing you didn't choose. For example, if you choose to buy a toy for $10, the opportunity cost is the $10 you could have used to buy something else.
A more thorough explanation:
Definition: Opportunity cost is the value of the next best alternative that is forgone when making a decision. It is the cost of choosing one option over another.
Example: If you have $100 and you decide to spend it on a concert ticket, the opportunity cost is the value of the next best alternative that you could have spent that $100 on, such as a new pair of shoes or a dinner with friends.
The concept of opportunity cost is important in decision-making because it helps individuals and businesses to weigh the benefits and drawbacks of different options and make informed choices. By considering the opportunity cost, they can determine whether the benefits of a particular decision outweigh the costs.