Which concept describes the opportunity cost?

The concept that describes opportunity cost is the loss of potential gain from other alternatives when one alternative is chosen. Opportunity cost is a fundamental principle in economics that reflects the value of the next best alternative that must be forgone when making a decision. This means that whenever a choice is made, the benefits that could have been obtained from selecting the second-best option are lost.

For example, if an individual decides to use their time to work instead of studying, the opportunity cost is the potential benefits, such as higher future earnings or a better understanding of the subject matter, that would have come from studying. Understanding opportunity cost helps individuals and businesses make more informed decisions by recognizing that every choice comes with trade-offs.