Opportunity cost

Updated: Aug 20, 2021

A hypothetical measure of the monies forfeited when an asset is put to one out of two possible uses. It is the amount that, in theory, that asset would have earned in the other use. Income so forfeited should, ideally, be less than that earned or be outweighed by other benefits gained and thus justify the particular investment made.

Reference: The Penguin Business Dictionary , 3rd edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.