Which statement about opportunity cost is true?

Opportunity cost is a crucial concept in economics and financial decision-making that represents the potential benefits one misses out on when choosing one alternative over another. When a decision is made, there are always trade-offs involved, meaning that selecting one option means forgoing the potential gains of the other alternatives.

In this context, option C accurately captures the essence of opportunity cost by emphasizing that it encompasses not just the financial aspect, but also the value of the benefits that could have been received from the next best alternative that was not chosen. This understanding allows individuals and businesses to evaluate their choices more effectively, taking into account both explicit costs and the benefits of the alternatives that are sacrificed.

Understanding opportunity cost is crucial for making informed decisions, whether in personal finance, investing, or business strategy, as it encourages individuals to consider the broader implications of their choices beyond immediate financial impacts.