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Opportunity Cost: The Cost of Taking Time to Read - Essay Example
The cost of Random House books, after an adjustment for inflation, has never been a bigger bargain. Yet, though their cost is as low as they have been in the past century, sales continue to slide. In a traditional business model, we would expect lower prices to increase sales…
Reading is in competition for people's leisure time against a myriad of other activities. Family, sports, and entertainment all vie for those precious moments that the consumer has available, and these factors have added an escalating opportunity cost to the price of our books.
Opportunity cost implies making tradeoffs, and is considered to be the value of the alternatives that they have sacrificed by the decisions that they make (Wessels, 4). When considering the time it takes to read a book, the consumer must evaluate the value of their time. If time was unlimited, there would be no value placed on it, and there would be no opportunity cost. However, in this very busy world that we live in leisure time is scarce. In fact, it is this scarcity that has driven up the opportunity cost in recent decades. As activities compete for this scarce commodity, the value of it rises dramatically.
How does a consumer place a value on their leisure time In the business world, opportunity cost can be valued by considering other uses for existing capital and labor. On the individual level, this matter-of-fact calculation may be incomplete. Some experts contend that our leisure time is valued at the amount of money the individual could be earning in the next hour worked (Spotila). However, Donald B. Rosenfield of the MIT Sloan School of Management says, "Most people don't explicitly think about it. ...