Opportunity cost is determined by calculating how much of one product can be produced based on the opportunity cost of producing something else. Learn how to calculate opportunity costs to make efficient economical choices using the production of wheat versus rice as an example. Best Economical Cho...
A simple opportunity cost definition fromOxford Learner’s Dictionariesis: Opportunity cost is when you choose one option and thus lose the potential benefits of the other options. Opportunity costs are a consequence of scarcity. You don’t have endless time and money to pursue each alternative. ...
Law of Demand In microeconomics – the field of economics concerned with the decision-making patterns of individual buyers and businesses – the law of demand states that when the cost of a product or good increases, demand for that product or service decreases and vice versa, when all other ...
A firm’s “economic costs” include the firm’s accounting costs as well as opportunity costs. For Pauline’s Pies, the economic cost of producing frozen pizzas would include all of the accounting costs listed above, as well as the opportunity cost of producing frozen pizzas (e.g., the ...