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What is the simple meaning of opportunity cost in business?

Answer and explanation

Correct answer: The value of the next best alternative given up when one option is chosen

Opportunity cost is the value of the next best alternative sacrificed when a choice is made. For example, if business funds are used for equipment instead of advertising, the benefit that advertising could have produced is the opportunity cost. It is not total expenditure, a discount, or guaranteed profit.

Related tags

Opportunity CostResource AllocationEntrepreneurship DevelopmentMsme And Business EntrepreneurshipBusiness StudiesClass 11 Mcq

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