Why Is Opportunity Cost Important?

Answer

Opportunity cost is the cost of an alternative that must be skipped over in order to perform an action. It is basically a lost chance. It is important in making decisions as the higher the opportunity cost is, the poorer the decision made was, in general. Evaluating opportunity costs for each option is necessary for the best decision and outcome possible.
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The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next
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