Enter the return on the best option ($) and the return on the chosen option ($) into the Opportunity Cost calculator. The calculator will evaluate and display the Opportunity Cost. 

Opportunity Cost Formula

The following formula is used to calculate the Opportunity Cost. 

OC = RB - RC
  • Where OC is the Opportunity Cost ($)
  • RB is the return on the best option ($) 
  • RC is the return on the chosen option ($) 

To calculate the opportunity cost, subtract the return of the chosen option from the return of the best option.

How to Calculate Opportunity Cost?

The following example problems outline how to calculate Opportunity Cost.

Example Problem #1:

  1. First, determine the return on the best option ($). The return on the best option ($) is given as 5,000.
  2. Next, determine the return on the chosen option ($). The return on the chosen option ($) is provided as 3,000.
  3. Finally, calculate the Opportunity Cost using the equation above: 

OC = RB – RC

The values given above are inserted into the equation below:

OC = 5,000 – 3,000 = 2,000 ($)

Example Problem #2: 

The variables needed for this problem are provided below:

return on the best option ($) = 2,500

return on the chosen option ($) = 500

Entering these values and solving gives:

OC = 2,500 – 500 = 2000 ($)