What is the term for the value of the best alternative that is not chosen?

The value of the best alternative that is not chosen is referred to as "Opportunity Cost." This concept is critical in economics as it helps individuals and businesses understand the trade-offs involved in making choices. When a decision is made to pursue one option over another, the opportunity cost is the benefit that is foregone from the alternative that was not selected.

Understanding opportunity cost is important for assessing the potential returns of different choices, be it in resource allocation, time management, or investment decisions. It encapsulates the notion that every choice comes with a sacrifice, and recognizing this helps individuals make informed decisions that maximize their potential benefits while minimizing losses from foregone alternatives.

The other terms mentioned do not align with this definition: equilibrium price relates to market balance between supply and demand, surplus refers to excess supply in relation to demand, and shortage pertains to demand exceeding supply. Each of these concepts serves different functions within economic discussions but does not capture the essence of opportunity cost.