8 Popular Role of Managerial Economics in Decision Making
1.Opportunity Cost Principle
The sacrifice of alternative courses of action for any decision is referred to as opportunity cost. Opportunity cost may be defined as, ‘the revenue foregone or opportunity lost by not using the resources in second best alternative use’. It is also called imputed cost. Measurement of sacrifice is done by opportunity cost. The sacrifice which is made for taking a decision is measured by opportunity cost. This concept can be explained by following points.
