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What is the opportunity cost of investing in a company?

Let’s say you decided to invest in Company A, which nets you $1,000. Investing in Company B would have netted you $1,500. You’d plug those numbers into the formula like so: Opportunity cost = $1,500 – $1000 = $500 Thus, the opportunity cost of this choice is $500.

What is an example of an opportunity cost?

The opportunity cost in this example is the time spent with friends. Fast Food Vs. Fancy Restaurant: Choosing to eat at a fancy restaurant instead of a fast-food restaurant comes with a cost.

How does opportunity cost work?

Please help keep Khan Academy free, for anyone, anywhere forever. Opportunity cost is the trade-off that one makes when deciding between two options. The example of choosing between catching rabbits and gathering berries illustrates how opportunity cost works.

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