Answer:
Opportunity cost
Explanation:
Suppose that a university decides to spend $ 1 milion to upgrade personal computers and scientific equipment for faculty rather than spend $ million to expand parking for students . This example illustrates opportunity costs.
Opportunity cost refers to the cost shifting one opportunity to another opportunity or availing one opportunity in terms of another.
Formula of Opportunity cost is :
Opportunity cost = Total Revenue - Economic Profit
Or
Opportunity cost = What one sacrifice / What one gain
In Opportunity cost we chose one thing or option over the cost of another thing or option. Opportunity cost places a important role in economic theory .
As it tell us that people can choose only one thing not the both things at the sane time.
