Opportunity Cost Examples. So, what is opportunity cost? What are some other examples of opportunity cost? For example, a private investor purchases $10, 000 in a certain security, such as shares in a corporation, and after one year the investment has appreciated in value to $10, 500. Green Metro, Inc. is a company interested in public transportation projects in developing countries. In business circles, the opportunity cost is known as economic cost and its existence is limited to the production process. Opportunity Cost In business, the sunk cost is often considered before undertaking a project. Opportunity Cost Examples. Opportunity Cost Example For Ecommerce Merchants We have already given three examples of Opportunity Costs for ecommerce merchants. examples of opportunity costs One way to demonstrate opportunity cost lies in the employment of investment capital. Therefore, in calculating net initial investment outlay, analysts need to ignore the sunk costs but include opportunity costs in their analysis. The opportunity cost is time spent studying and that money to spend on something else. What Does Opportunity Cost Mean? Opportunity Cost and practical applications. Opportunity Cost is the benefit that an individual is losing out by choosing one option instead of another option. Explicit opportunity cost has a direct monetary value. Thus the opportunity cost of the computer is the income expected from the Xerox machine. A simple example of opportunity cost is to let us suppose that a person is having Rs. You can use this money to buy a KFC Mighty Zinger or an Accounting textbook for your upcoming quiz. The two types of opportunity costs are explicit opportunity cost and implicit opportunity cost. The opportunity cost to enjoy a KFC Mighty Zinger, therefore, is an Accounting textbook. For example, a food company may spend $10,000 on a market research study to assess whether repackaging their orange juice will make a difference in brand recognition and awareness. Here are a few examples. But there is an important Opportunity Cost specifically when choosing between a traditional ecommerce model and that of dropshipping. In this example, the opportunity costs are continued interest gains on bond "A" and the initial loss of $10,000 on bond "B" while hoping to recover it and increase your profits in the future. Example of Sunk Cost vs. Example. Here are some interesting opportunity cost examples that would definitely strengthen your grip on this simple yet rational economic concept! For instance, if a restaurant buys $1,000 worth of ground beef, the cost is the other things that it could have purchased with that money, like chicken wings or hamburger buns. Let's say you have only $100 to spend and you have two choices: you can eat at a nice restaurant or you can buy seven music albums instead. If you choose to buy a burger, you won’t be able to afford the Accounting textbook. What It Means for Individual Investors . Definition: An opportunity cost is the economic concept of potential benefits that a company gives up by taking an alternative action.In other words, this is the potential benefit you could have received if you had taken action A instead of action B. A student spends three hours and $20 at the movies the night before an exam. Let’s suppose you have $10. Opportunity Cost: Examples. This is easy to see while looking at the graph, but opportunity cost can also be calculated simply by dividing the cost of what is given up by what is gained. Before you sprint towards the opportunity cost examples provided in this article, it is essential that you understand the concept first. 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