Opportunity Cost from Topics Education on Vimeo.
Mrs Hyde's Business and Economics Blog
Tuesday 14 December 2010
AS EconBus and AS Microeconomics: Opportunity cost
The opportunity cost is the next best alternative foregone. Investors often have to choose between a range of investment possibilities. They have to estimate in advance how profitable they will all be. Once they have invested their capital in one project, it will be gone and no longer available for the other projects (which the entrepreneur estimated to be less profitable). These investment opportunities have therefore been foregone!
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