Economics Short Run Vs Long Run Costs Questions
In the short run, opportunity costs refer to the benefits or profits that are forgone or sacrificed when choosing one alternative over another. It is the value of the next best alternative that is given up in order to pursue a particular course of action. In economic terms, opportunity costs are the costs of using resources in a particular way, which could have been used for alternative purposes. These costs are particularly relevant in the short run when resources are limited and fixed, and firms have to make decisions on how to allocate these resources efficiently.