After Saeed graduates from HCT he starts looking for a job

. After Saeed graduates from HCT he starts looking for a job. He is offered ajob A which pays 35,000 AED per month and a job B, which pays 30,000 AED per month. At this point he is approached by his classmate Ahmed, who proposes to him to start their own company in the event organizing business.If Saeed decides to go into business with Ahmed, what is his opportunity cost?

Solution

Opportunity cost is the next best alternative forgone. So here if Saeed joins to start own company then he has to forgo 35,000 AED per month which is next best alternative and hence the opportunity cost too.