What is the difference between Opportunity and Marginal Cost? - ProProfs Discuss
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What is the difference between Opportunity and Marginal Cost?

Asked by G. GRAY, Last updated: Apr 17, 2020

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M. Klose

M. Klose, Content Writer, Oakland

Answered Mar 31, 2020

Opportunity cost is a financial or an economic notion or idea which explains the relationship that exists between choice and scarcity while the marginal cost is also an economic or a financial idea just like opportunity cost, which depicts cost incurred in the production of an additional unit.

The marginal cost usually has a monetary value. Opportunity cost may or may not have a monetary value. Opportunity cost includes benefits that should have been enjoyed in case the other choice was made; the benefits may include the value of lost time, utility, etc. while Marginal Cost doesn't. Opportunity costs are not visible, while Marginal Cost is usually visible.

Marginal cost can also be explained as the cost that is incurred during the process of production of an item or a unit, while opportunity costs are best explained as the cost which is incurred as the customer decides or make a choice on whether to buy a product or not to buy it.

 

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