Introduction: Understanding opportunity cost is crucial in decision-making. This article provides a practical calculator to determine opportunity cost based on a graphical representation.
Formula: Opportunity Cost = Benefit – Investment
How to Use:
- Enter the investment value.
- Enter the benefit value.
- Click the “Calculate” button to get the opportunity cost.
Example: Suppose you invest $500 and receive a benefit of $700. The opportunity cost is $700 – $500 = $200.
FAQs:
- Q: What is opportunity cost? A: Opportunity cost is the potential benefit that is forgone when one alternative is chosen over another.
- Q: Why is opportunity cost important? A: It helps individuals and businesses make informed decisions by considering the value of the next best alternative.
- Q: Can opportunity cost be negative? A: Yes, it can be negative if the benefit is less than the investment.
Conclusion: Calculating opportunity cost from a graph becomes seamless with this easy-to-use calculator. Consider opportunity cost in your decision-making to make more informed choices.