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    Opportunity Cost.

    Uploaded by

    Jam Mendez
    The document discusses opportunity cost and defines it as the forgone benefit of the next best alternative when making a choice. It explains that opportunity cost is important to consider when making decisions to guide to more profitable outcomes. It also defines two types of opportunity costs: implicit, which are intangible, and explicit, which refer to easily accounted costs that can be counted in dollar amounts.

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    Opportunity Cost.

    Uploaded by

    Jam Mendez
    7 views2 pages
    The document discusses opportunity cost and defines it as the forgone benefit of the next best alternative when making a choice. It explains that opportunity cost is important to consider when making decisions to guide to more profitable outcomes. It also defines two types of opportunity costs: implicit, which are intangible, and explicit, which refer to easily accounted costs that can be counted in dollar amounts.

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    Opportunity cost.

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    The document discusses opportunity cost and defines it as the forgone benefit of the next best alternative when making a choice. It explains that opportunity cost is important to consider when making decisions to guide to more profitable outcomes. It also defines two types of opportunity costs: implicit, which are intangible, and explicit, which refer to easily accounted costs that can be counted in dollar amounts.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    7 views2 pages

    Opportunity Cost.

    Uploaded by

    Jam Mendez
    The document discusses opportunity cost and defines it as the forgone benefit of the next best alternative when making a choice. It explains that opportunity cost is important to consider when making decisions to guide to more profitable outcomes. It also defines two types of opportunity costs: implicit, which are intangible, and explicit, which refer to easily accounted costs that can be counted in dollar amounts.

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    Sa book gkan:

    The opportunity cost of an item is what you give up to get that item. When making any decision,
    decision makers should be aware of the opportunity costs that accompany each possible action

    Since resources are limited, every time you make a choice about how to use them, you are also choosing
    to forego other options. Economists use the term opportunity cost to indicate what must be given up to
    obtain something that’s desired.

    The idea behind opportunity cost is that the cost of one item is the lost opportunity to do or consume
    something else; in short, opportunity cost is the value of the next best alternative.

    Opportunity cost is the forgone


    benefit that would have been derived by an
    option not chosen.

    To properly evaluate opportunity costs,


    the costs and benefits of every option available must be considered and weighed against the others.

    Considering the value of opportunity costs can guide individuals and organizations to more profitable
    decision-making.
    The following are the two most common types of opportunity costs:

    Implicit opportunity cost: This type of opportunity cost is an intangible cost that cannot be easily
    accounted for.

    Explicit opportunity cost: This type of opportunity cost refers to costs that are easily accounted for.
    Explicit costs are typically costs that can be counted, such as a dollar amount.

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