Opportunity Cost enters into your decision
making criteria when you have several options top consider, including spending
the money on several choices of investment.
For example, I own a store space in a shopping mall. I can open a store using that space but I would then need to invest in the furniture, displays etc. Alternatively I could just rent our the space to a potential seller and get a rental revenue.
My decision would depends on how much money I would estimated to profit from selling my products (after my investments) compared to how much money I would earn from renting the space. There might be another possibility, I could rent half of the space & use the other half to sell my stuff (changing my opportunity cost).
For example, I own a store space in a shopping mall. I can open a store using that space but I would then need to invest in the furniture, displays etc. Alternatively I could just rent our the space to a potential seller and get a rental revenue.
My decision would depends on how much money I would estimated to profit from selling my products (after my investments) compared to how much money I would earn from renting the space. There might be another possibility, I could rent half of the space & use the other half to sell my stuff (changing my opportunity cost).
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