What is the definition of opportunity cost?

Opportunity cost refers to the value of the next best alternative that is forgone when making a choice. It reflects the concept of trade-offs in economics, where choosing one option means sacrificing another potential benefit. When evaluating decisions, understanding opportunity cost helps individuals and businesses to weigh the potential gains from different choices against what they will have to give up.

In this case, option C accurately captures the essence of opportunity cost by highlighting the comparison between what is sacrificed and what is gained. This understanding allows better decision-making by acknowledging the value of alternatives not taken.