• jimbo@lemmy.world
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    1 year ago

    Opportunity cost is still a cost, and this article is about “costs”.

    • June@lemm.ee
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      1 year ago

      First and foremost the headline is intended to make it sound like Spotify is losing that money. Just look at the comments here and you can see that it’s very commonly misunderstood.

      That said, opportunity cost is considered an irrelevant cost.

      A relevant cost deals with actual cash flow, and opportunity cost is vapor because it doesn’t actually hit the ledger in any way. It’s nothing more than a way to express potential revenue changes, which are really just educated guesses.

      If opportunity costs were meaningful at all then every business would be losing trillions of dollars.