Social opportunity cost

Updated: Aug 20, 2021

The amount of other goods which has to be forgone because resources are used to make some particular good. When any goods services are produced, the resources used to make them are not available for other purposes. Social opportunity cost takes account of any externalities, as well as direct costs to the producers. It is contrasted with private opportunity cost, which takes account only of direct opportunity costs to the producers, disregarding any externalities.

Reference: Oxford Press Dictonary of Economics, 5th edt.

Sources & references
Risk disclaimer
James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.