ENTREPRENEURSHIP

Detailed explanation-1: -You need to determine the opportunity cost. Put simply, opportunity cost is what a business owner misses out on when selecting one option over another. It’s a way to quantify the benefits and risks of each option, leading to more profitable decision-making overall.

Detailed explanation-2: -When making a business decision between several options, what are you determining you estimate the opportunity cost? The benefits missed when choosing one option over another.

Detailed explanation-3: -Opportunity cost calculates the benefits you could lose if you choose one option instead of another. To calculate opportunity cost, you estimate the costs and benefits that every investment option could generate and then compare them to choose the most profitable investment.

Detailed explanation-4: -This concept acknowledges not just the explicit costs of a choice but also the implicit costs of what you forgo when you make that decision. Opportunity cost provides a framework for decision-making to find the most benefit, particularly for limited resources like time and money.