ECONOMICS

Opportunity Cost



Opportunity Cost

Introduction

The opportunity cost or alternative cost is defined as that cost that is incurred when making a decision against another alternative. It is the value or utility that a person sacrifices for selecting alternative A against alternative B. Every decision made is an implicit renunciation of the usefulness or benefits that would have been obtained if the individual had taken any other decision (Gamal, 2006). For every situation there is always more than one way to address it, and each offers different pros and cons. Cost benefit analysis is term of money, time and scope is done before ...