Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another.
opportunity costs are unseen by definition, they can be easily overlooked. Understanding the potential missed opportunities when a business or individual chooses one investment over another allows for better decision-making.
Opportunity cost is the forgone benefit that would have been derived from an option not chosen.
To properly evaluate opportunity costs, the costs and benefits of every option available must be considered and weighed against the others.
Considering the value of opportunity costs can guide individuals and organizations to more profitable decision-making.