what is opportunity cost

Opportunity cost is a fundamental concept in microeconomic theory. It refers to the value of the best alternative that is forgone when a choice is made between mutually exclusive alternatives, given limited resources. In other words, it is the potential benefit that is lost when one alternative is chosen over another. Opportunity cost is not restricted to monetary or financial costs, but it also includes the real cost of output forgone, lost time, pleasure, or any other benefit that provides utility. It is essential for ensuring the efficient use of scarce resources and is a critical consideration in decision-making processes, both in economics and business