Opportunity Costs Definition: What are Opportunity Costs? Opportunity costs, also known as alternative costs, are the potential benefits that are foregone if a decision is made in favor of a particular option and other alternatives are therefore excluded. In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would have been had if the second best available choice had been taken instead. [1] The New Oxford American Dictionary defines it as "the loss of potential gain from other alternatives when one ... Discover the power of opportunity cost! Learn how to make smarter decisions in business and life by understanding what you give up with every choice. Opportunity Cost Definition Opportunity cost is the implicit cost incurred by missing out on an investment, either with one's time or money. Because resources are finite, investing in one opportunity causes another opportunity to be forgone. It's the value of what you're giving up to pursue the current course of action.
