opportunity cost

noun

: the added cost of using resources (as for production or speculative investment) that is the difference between the actual value resulting from such use and that of an alternative (such as another use of the same resources or an investment of equal risk but greater return)

Examples of opportunity cost in a Sentence

Recent Examples on the Web That opportunity cost can be voter confusion — or, in my case, angst and avoidance. Erika D. Smith, Los Angeles Times, 5 Mar. 2024 There is an opportunity cost for Israeli politics, too. Bernard Avishai, The New Yorker, 2 Mar. 2024 For instance, if an entrepreneur chooses to invest resources in one project, the opportunity cost is the potential benefit from investing those resources elsewhere. Abdo Riani, Forbes, 29 Feb. 2024 This one name doesn’t tell the full story, though, and investors who are sitting on the sidelines may be paying a steep opportunity cost. Or maybe not. Frank Holmes, Forbes, 20 Feb. 2024 At the very least, social media are addictive and represent an opportunity cost compared with time that could be spent talking with friends, going outside, or even reading a book. Rich Lowry, National Review, 2 Feb. 2024 There’s a high opportunity cost to holding onto cash. Nicole Goodkind, CNN, 7 Feb. 2024 These distinctions matter because of opportunity costs. Michael Poznansky, Foreign Affairs, 5 Jan. 2024 Overall, one of the most important things to consider with this method is the opportunity cost of making more payments per year. Sydney Lake, Fortune, 25 Oct. 2023

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'opportunity cost.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

First Known Use

1894, in the meaning defined above

Time Traveler
The first known use of opportunity cost was in 1894

Dictionary Entries Near opportunity cost

Cite this Entry

“Opportunity cost.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/opportunity%20cost. Accessed 29 Mar. 2024.

Legal Definition

opportunity cost

noun
op·​por·​tu·​ni·​ty cost
: the cost of making an investment that is the difference between the return on one investment and the return on an alternative

More from Merriam-Webster on opportunity cost

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