opportunity cost
- The expense incurred while making an investment, measured as the discrepancy between the return on the chosen investment and the return on a distinct but comparable investment
- When a business decides to build a new factory, it must consider the opportunity cost of the potential profits that would have been made from investing that money elsewhere.
- The opportunity cost of buying a luxury car includes the possible returns that could have been earned from investing the money instead.
- Choosing to spend time studying instead of watching a movie shows an individual's consideration of the opportunity cost in regards to their future career.
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