Opportunity Cost
The value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, it is the ‘cost' incurred by not enjoying the benefit that would have been had by taking the second-best available choice.
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Origin
The idea traces to French economist Frédéric Bastiat’s 1850 essay That Which Is Seen, and That Which Is Not Seen, which introduced the parable of the broken window. Austrian economist Friedrich von Wieser gave it its formal name in 1914. The concept is foundational to microeconomics: every choice has a hidden cost — not the money spent, but the best alternative you didn’t pursue.
Updated February 22, 2026