The concept of Opportunity Cost plays a crucial role in economics. It is defined as the cost of the next best alternative that is forgone when a choice is made. In simple words, it's what you sacrifice versus what you gain. The formula for calculating opportunity cost is as follows: Opportunity Cost = What You Sacrifice / What You Gain. Alternatively, it can also be calculated as Opportunity Cost = Total Revenue – Economic Profit.

For a deeper understanding of this and other key economic concepts, you can refer to the Indian Economy Notes For UPSC Preparation provided in the link.