Opportunity cost is the potential benefit you miss out on when choosing one alternative over another.
It's the value of the next best option that you forgo. Understanding opportunity cost is crucial for making informed decisions, as it forces you to consider the trade-offs involved and the potential benefits of alternatives you didn't choose.
Recognizing this helps in making more effective and informed decisions in various aspects of life, from personal finance to business strategy.
It's the value of the next best option that you forgo. Understanding opportunity cost is crucial for making informed decisions, as it forces you to consider the trade-offs involved and the potential benefits of alternatives you didn't choose.
Recognizing this helps in making more effective and informed decisions in various aspects of life, from personal finance to business strategy.
- Trade-off:
When you choose one option, you're making a trade-off by giving up the opportunity to pursue another.
- Not just monetary:
Opportunity cost isn't always about money. It can also involve time, effort, or even happiness.
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