But let's make sure we understand opportunity cost.
When referring to opportunity costs, investors often see it as the benefit you would have received by taking an alternative financial action.
The difference in return between a chosen investment and your forgone alternative is essentially your opportunity cost.
So this right over here, you can also view it as the marginal cost.
In the context of this video, our costs are in terms of the thing that I'm giving up, the opportunity that I'm giving up.
But what's the opportunity cost-- let's say, we're tired of eating meat.
We're sitting in scenario E, and we want to become vegetarians altogether.
It serves as a measure of an economic choice as compared to the next best one.
For example, there is an opportunity cost of choosing to finance a company with debt over issuing stock.
And we can do it at different points of this curve, and I actually encourage you to do.
Based on the data that we have in this table that we constructed in the last video and maybe this curve, think about what the opportunity cost is in the different scenarios.
Comments Economic Term Opportunity Cost
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This is a concept used in economics. Applied to a business decision, the opportunity cost might refer to the profit a company could have earned from its capital.…
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The concept of opportunity cost occupies an important place in economic theory. The concept was first developed by Wieser. The opportunity.…
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Opportunity cost is the positive opportunities missed out on by choosing a. are a couple of common ways to conceptualize it in mathematical terms. This straightforward formula calculates the difference between economic.…
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What is its relationship to the usual meaning of cost. The economic view of the world is that people acquire puppies because the value they expect exceeds.…
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An opportunity cost is the cost of an opportunity. enterprise, the term opportunity cost is applicable to all sorts of decision making relating to investments. It is a fundamental economic costing technique used in projects to.…
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Because economists like to economize on effort, the succinct term cost is also frequently used in lieu of opportunity cost or economic cost. In fact, whenever the.…