Opportunity cost refers to the potential benefit or value that is forgone or sacrificed when choosing one option over another. It represents the next best alternative or the value that could have been obtained by choosing an alternative course of action. When a decision is made, the opportunity cost is the value of the best alternative that had to be given up. Understanding opportunity cost helps in evaluating trade-offs and making informed decisions by considering the potential benefits and drawbacks of different options. It highlights the value of the foregone opportunity in relation to the chosen option.
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