In economics, opportunity costs are the potential benefits you lose out on when you choose one option over another. An opportunity cost of ordering a strawberry milkshake is how delicious the chocolate one might have been.
Think of opportunity costs as potential missed opportunities. For economists, it's important to weigh these possible costs when making a financial decision, like whether to invest money or spend it on your business. The opportunity costs of investing might include making do with old equipment or being unable to hire new employees. On the other hand, spending on those things has an opportunity cost of potential stock market profits. Whenever you make a choice, there's an opportunity cost!