What do we call the cost of the next best alternative when making a choice?

The concept being described is opportunity cost, which refers to the value of the next best alternative that is foregone when a decision is made. In economics, every choice has a cost associated with it, and this cost is not always monetary. Instead, it reflects the benefits you miss out on by not selecting an alternative option. For example, if you decide to spend time studying for a test instead of going out with friends, the opportunity cost is the enjoyment and experiences you would have gained from that social outing.

The other options provide different types of costs that are not related to the concept of opportunity cost. Fixed costs refer to expenses that do not change with the level of production or sales, while variable costs fluctuate according to the volume of goods or services produced. Marginal cost, on the other hand, is the additional cost incurred from producing one more unit of a good or service. These definitions highlight why opportunity cost is the relevant term for this concept—it's specifically about evaluating the trade-offs in decision-making based on what you must give up.