opportunity cost

American  

[op-er-too-ni-tee kawst] / ˌɒp ərˈtu nɪ ti ˌkɔst /

noun

Economics.

1. the money or other benefits lost when pursuing a particular course of action instead of a mutually-exclusive alternative.

   The company cannot afford the opportunity cost attached to policy decisions made by the current CEO.

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opportunity cost British  

noun

1. economics the benefit that could have been gained from an alternative use of the same resource

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Etymology

Origin of opportunity cost

First recorded in 1910–15

Compare meaning

How does opportunity-cost compare to similar and commonly confused words? Explore the most common comparisons:

• trade-off vs. opportunity cost

Example Sentences

“It may help you avoid some fraction of the selloffs, but you incur a huge opportunity cost in losing out on the run-ups.”

From The Wall Street Journal

The nomination also bolstered the U.S. dollar, which raised the opportunity cost of holding dollar-denominated assets.

From Barron's

On the other side of the ledger is the opportunity cost of spending cash rather than investing it — often cited as roughly 7% based on long-term stock market averages.

From MarketWatch

Lower interest rates typically benefit precious metals by reducing the opportunity cost of holding a non-yielding asset relative to interest-bearing bonds.

From The Wall Street Journal

Lower returns on risk-free assets like Treasurys reduce the opportunity cost of holding gold, which offers no yield yet has much greater upside potential.

From The Wall Street Journal