opportunity cost is the value of the forgone alternative. The value can be measured in time, money, and satisfaction.
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Opportunity Cost = What You Give Up / What You Gain
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(highlight:: Opportunity Cost = Revenue – Economic Profit
To understand opportunity cost in the business world, you need to know what economic profit is. Economic profit is the money that a business makes after deducting both implicit and explicit costs. The idea is that business needs to generate revenue over opportunity costs to grow and thrive.)
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For example, Netflix doesn’t cost you $15.49, it actually costs your time; social media isn’t free, it costs your focus; and a fast-food combo meal doesn’t just cost you $7.99, it costs your health. Or for instance, working over time doesn’t just cost your hours, but your fulfilling family relationship.
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