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Define opportunity cost
The opportunity cost of any commodity is defined as the cost of next best alternative, which has been sacrificed for producing the given commodity. The concept of opportunity cost is derived from the diverse or alternate uses of the resources available in the economy. If the resources are used for the production of one alternative then, the benefit of the given resource from other alternative is sacrificed. This sacrifice of withdrawing the given resources in alternative activity, in order to carry out a given activity, is termed as opportunity cost.
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