Oportunity cost is the cost of one choice in terms of the best forgone alternative . If you cannot obtain what you need , then you have to choose among the alternative . The next alternative that you choose not to do is the cost of the thing that you choose to do .
Definitions of opportunity cost - opportunity cost is defined as the second best altertnative that has to be forgone for another choice which gives more satisfaction .
Example - Dina has Rm 5 and she would like to buy two things : a book and a pen which cost Rm 5 each ( unlimited wants but limited resources ) . Dina has to choose either to purchase a book or a pen which would satisfy her needs ( choices ) . If Dina chooses the book , then the pen is the opportunity cost because it is the second best alternative which she has to forgo .
Opportunity cost - Second best alternative that has to be forgone for another choice which gives more satisfaction .
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