Opportunity Cost

Opportunity Cost Meaning:
The cost inherent in making a choice, and thereby losing the opportunity to make other (mutually exclusive) choices. The specific opportunity cost for a given action is the specific value that would be gained by doing the next-best thing instead.

Opportunity costs are a very important concept in economics and examples of them abound. Every time someone spends money (for example, $2 on a cup of coffee) they suffer an opportunity cost because now that money is unavailable for spending on something else (for example, a $2 newspaper).