Opportunity cost is what you give up when you choose one option over another. It’s the value of the next best thing you could have done with your time, money, or resources.
For example:
• If you spend $100 on a concert ticket, the opportunity cost might be not saving that money or not spending it on something else you need.
• If you use your time to watch TV, the opportunity cost could be missing out on studying or exercising.
It’s a way to think about the trade-offs in any decision.