Opportunity cost refers to the value of the next best alternative that you give up when making a choice and is a key concept in IGCSE Business and economics.
In simple terms, when you decide to do one thing, you lose the chance to do something else.
For example, if a business spends £10,000 on advertising, it might have to delay buying new equipment. Similarly, if a student spends time studying Business, they might miss out on playing sports.
Understanding opportunity cost helps both individuals and businesses make smarter decisions by thinking about what they are sacrificing. Businesses must carefully consider opportunity costs when choosing how to spend money, use resources, or invest in new projects. By weighing up different options, they can make better choices that help them grow and succeed.
Opportunity Cost Revision Resources to Ace Your Exams
Save My Exams has a great range of resources to explore the topic of opportunity cost further.
Read our IGCSE Business revision notes on opportunity cost, or test your knowledge of opportunity cost in our exam questions to improve your grades.
Examiner-written IGCSE Business revision resources that improve your grades 2x
- Written by expert teachers and examiners
- Aligned to exam specifications
- Everything you need to know, and nothing you don’t
Share this article
written revision resources that improve your