Opportunity Cost
Value what you give up by choosing one option over another.
About Opportunity Cost
Opportunity cost is the value of the best alternative you forgo, including costs beyond the sticker price. Every choice has a hidden cost in the alternatives not taken, which explicit comparison makes visible.
Formula
Opportunity Cost
Opportunity cost = next best option - value of chosen choice
- next best
- The best alternative you gave up
Worked example
With the default values below, Opportunity Cost returns Opportunity Cost of $70.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Value of chosen option
- 500
- Value of next best option
- 650
- Hidden costs of choice
- 80
Results
- Opportunity Cost
- $70.00
- Total Cost of Choice
- $580.00
- Net Gain vs Alternative
- $0.00
Step by step
- 1Values used
- 2Opportunity Cost
- 3Opportunity Cost= 70.00
- 4Total Cost of Choice= 580.00
- 5Net Gain vs Alternative= 0.00
Assumptions and limits
- The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or compounding frequency into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Opportunity Cost calculated?
Opportunity cost = next best option - value of chosen choice Opportunity cost is the value of the best alternative you forgo, including costs beyond the sticker price.
Why does Opportunity Cost matter?
Every choice has a hidden cost in the alternatives not taken, which explicit comparison makes visible.
What values do I need to enter?
This calculator takes 3 inputs: Value of chosen option, Value of next best option, Hidden costs of choice. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.