Opportunity cost refers to the cost of second best alternative.?
Example -?
Mr. X has a land where he can produce wheat worth Rs. 50000 , rice worth Rs. 45000 and Maize worth Rs. 40000. Being a rational person he decided to produce wheat. In this case the opportunity cost is the cost of rice i.e. Rs. 45000 as it is the second best alternative to wheat.?
Thus, the opportunity cost of producing wheat is Rs. 45000.?
