Definitions of opportunity cost on the
The cost of pursuing one course of action measured in
terms of the foregone return that could have been earned on an alternative course of
The value of foregone opportunities or alternatives
unable to be achieved because of time or money towards some other option.
The potential benefit that is foregone from not
following the best (financially optimal) alternative course of action.
A factor in the pricing of an option, as a function
of the prevailing level of interest rates.
The benefit foregone by using a scarce resource for
one purpose instead of for its best alternative use. For example, an opportunity cost of
establishing protected areas may be the value of reduced agricultural production from the
Cost of goods and services that must be given up in
order to obtain other goods and services.
The economic cost of using a resource for a specific
activity is equal to the income foregone by not using it for an alternative activity. For
example, the opportunity cost of using an acre of land in your farming operation is the
income foregone by not renting it to a neighboring farmer. ...
The cost of an economic activity foregone by the
choice of another activity.
The cost of something in terms of opportunity
foregone. The opportunity cost to a country of producing a unit more of a good, such as
for export or to replace an import, is the quantity of some other good that could have
been produced instead.
The difference in return between a chosen investment
and one that is necessarily passed up.
is widely used in business planning in evaluating
capital investment. A company measures the projected return against the anticipated return
it would receive on a highest yielding alternative investment that contains a similar risk
The cost of doing an activity instead of doing
something else - applied to the time involved in unproductive activities.
The value of the resource in its most valuable
generally intended to refer to foregone economic
value when a productive resource, such as labor, capital, land, or fish, is used to
produce one good or service instead of something else.
The amount of money lost if an opportunity is not
achieved (eg, time-to-market). Opportunity cost is usually calculated based on the
potential amount of money lost for each day an opportunity is delayed.
Most valuable alternative that is given up. The rate
of return used in NPV computation is an opportunity interest rate.
The economic value of a benefit that is sacrificed
when an alternative course of action is selected.
The loss of the next best alternative whenever a
decision is made involving two or more options.
To an economist a cost may not necessary reflect the
monetary value one is ready to surrender but rather what the foregone value of an action
is. For example, an economist uses the term opportunity cost to mean what is the foregone
value of not taking a particular action.
When one makes economic decisions, it is because of
limited resources. Alternatives must be considered. People make such decisions based on
expecting greater benefits from one alternative than another. There is an opportunity cost
involved in the choice. ...
cost in terms of foregoing alternatives
Opportunity cost is the cost incurred (sacrifice) by
choosing one option over the next best alternative (which may be equally desired). Thus,
opportunity cost is the cost of pursuing one choice instead of another. Every action has
an opportunity cost. ...
- The cost of something in terms of an opportunity foregone (and the
benefits that could be received from that opportunity), or the most valuable foregone
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