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 ($)
How to Calculate Opportunity Cost?
The following example problems outline how to calculate Opportunity Cost.
Example Problem #1:
- First, determine the return on the best option ($). The return on the best option ($) is given as 5,000.
- Next, determine the return on the chosen option ($). The return on the chosen option ($) is provided as 3,000.
- Finally, calculate the Opportunity Cost using the equation above:
OC = RB – RC
The values given above are inserted into the equation below:
OC = 5,000 – 3,000 = 2,000 ($)
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 ($)
