What is the concept of opportunity cost in economics?

Opportunity cost refers to the value of the next best alternative that is forgone when a decision is made. It represents the benefits you could have received by choosing an alternative option. For example, if you spend money on a vacation, the opportunity cost could be the investment or savings you forgo. This concept is crucial in decision-making, as it encourages individuals and businesses to consider what they are sacrificing when choosing one option over another. Opportunity cost helps people evaluate the trade-offs involved in every economic choice.