When making a rational decision which requires the consideration of costs and benefits involved, the opportunity cost of a decision is often not taken into consideration when indeed it should be.

Question

Quizplus · Accepted Answer

Opportunity cost is the cost of the next best alternative foregone when making a decision. It is important to take into consideration as every decision involves a trade-off between different options, and the opportunity cost helps to understand the value of the choice that was not made. Therefore, it is important to consider the opportunity cost along with the costs and benefits involved in making a rational decision.

When Making a Rational Decision Which Requires the Consideration of Costs