opportunity cost

Meanings

1. 1nouncountable or uncountablebusinessfinance

   The value of the best thing you give up when you choose one option instead of another.

   Grammar: Can be countable (an opportunity cost, opportunity costs) or uncountable (the idea of opportunity cost).

   Patterns

   • the opportunity cost of something
   • opportunity cost of doing something
   • consider the opportunity cost

   The opportunity cost of studying abroad is the salary you could have earned at home.

   Before buying the car, she thought about the opportunity cost of spending her savings.

   Economists say every decision has an opportunity cost, even if it is not obvious.

2. 2nouncountableinformal

   In everyday use, the loss of a chance that you realize only later.

   Grammar: Often used in the plural: the opportunity costs of delaying.

   Patterns

   • the opportunity cost of waiting

   Waiting another year had its own opportunity cost: the job was gone.

   The team talked about the opportunity costs of not training new staff.

Word forms

Common combinations

the opportunity cost of something

The opportunity cost of a year off can be high.

consider the opportunity cost

Investors should consider the opportunity cost of holding cash.

high opportunity cost

There is a high opportunity cost to tying up your money.

opportunity cost of capital

The firm calculated the opportunity cost of capital before investing.

Synonyms and how they differ

trade-off

A trade-off is the balance between two things you want; opportunity cost is specifically the value of what you lose.

forgone benefit

A more formal phrase for the benefit you give up; opportunity cost is the standard term in economics.

Word family

opportunity noun

A chance to do something.

cost noun

The amount of money or effort needed for something.

Commonly confused: opportunity cost or cost?

Practice

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