What is an opportunity cost and can you provide a simple example to illustrate how it impacts decision-making?

An opportunity cost is the value of the next best alternative that is forgone when a decision is made. For example, if you have 20 and you choose to spend it on a movie ticket, the opportunity cost is the value of what you could have purchased with that 20 instead, such as a meal or a book. This concept helps individuals and businesses make informed decisions by considering the trade-offs involved in their choices.