What Is The Opportunities Cost? This Is Understanding And Examples Of Daily Cases

Illustration of the cost of chances (Irfan Meidianto-VOI)

YOGYAKARTA In the world of economics, there is an istollah of the cost of opportunities. This term often appears not only in the line of business but in everyday life. Then, what is the actual cost of opportunities?

This article will provide an understanding of the cost of opportunities, from understanding to examples that occur in everyday life.

If you refer to the name, this type of cost is indeed related to an opportunity or opportunity. The cost of opportunities in English is known as Opportunity Cost. In general, the cost of opportunities is a number of costs that must be paid due to choosing the best opportunity from other opportunities.

The cost of opportunities can also be understood as a measure of the value of goods or services that must be sacrificed because the owner prefers other alternative opportunities from the opportunities that exist. When someone encounters several choices of opportunities but can only choose one option, then the option of opportunities that are not chosen is considered a cost of opportunities.

Or, when a person has resources that can only be used for one purpose even though he has 2 or three goals. So the remaining goal that is not chosen is considered a cost of opportunity.

As mentioned earlier, the cost of opportunities does not only appear in the business sector but in everyday life. Examples of the cost of everyday opportunities are as follows.

Tina has a capital of Rp. 10 million per month. He wanted to open a business and until he got two choices. The first choice was that he opened a convection business with a profit of Rp. 1 million per month, and the second choice was that he did not work and chose to apply for a job with a salary of Rp. 2 million per month.

After being considered, Tina finally chose to open a business that promised a profit of IDR 1 million per month. So, the option that was not taken was that the UMR salary of IDR 2 million was the cost of opportunities for his area to lose the opportunity to generate IDR 2 million.

That's information on what the cost of opportunities is. Visit VOI.ID to get other interesting information.