What are opportunity costs in business?

What are opportunity costs in business?

Opportunity costs refer to the potential benefits you miss out on when choosing one option over another in business.

Can you give me an example of opportunity costs?

Sure! If a company decides to invest in new machinery instead of marketing, the opportunity cost is the potential sales they could have gained from the marketing.

How do opportunity costs affect decision-making?

They help businesses evaluate the relative worth of different choices, ensuring resources are allocated efficiently.

Are opportunity costs always monetary?

Not necessarily! They can also include time, resources, and other non-monetary factors.