Difference between revisions of "Real price"
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| − | Real Price is the [[Opportunity Cost]] of a good or service. The real price of a good which costs $5 is the best alternative use of that $5. Even things that we often consider free have a real price. For example, the real price of watching television for an hour is the money you could have earned by working in that hour, or the money you could have enabled yourself to earn in the future by studying. | + | Real Price is the [[Opportunity Cost]] of a [[good]] or [[service]]. The real price of a good which costs $5 is the best alternative use of that $5. Even things that we often consider free have a real price. For example, the real price of watching television for an hour is the money you could have earned by working in that hour, or the money you could have enabled yourself to earn in the future by studying. |
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| + | [[Category:Economics]] | ||
Revision as of 10:17, March 11, 2007
Real Price is the Opportunity Cost of a good or service. The real price of a good which costs $5 is the best alternative use of that $5. Even things that we often consider free have a real price. For example, the real price of watching television for an hour is the money you could have earned by working in that hour, or the money you could have enabled yourself to earn in the future by studying.