The entrepreneur must understand the mind of the consumer in order to see opportunity costs in the way the consumer sees them.
Opportunity cost is a subjective evaluation on the consumer’s part. How do they look at alternatives when they are considering the entrepreneur’s offer? Would they assign greater value to the aluminum product compared to the stainless steel product? An entrepreneur needs to be able to answer that question in order to calculate how to design a good deal in the consumer’s eyes. Click here to download the PDF