Unlike implicit costs, explicit costs
A)reflect opportunity costs
B)include the value of the owner's time
C)are not included in a firm's accounting statements
D)are actual cash payments
E)do not change as a firm's output changes

Question

Quizplus · Accepted Answer

Explicit costs are actual cash payments made by the firm for the factors of production, such as wages, rent, and utilities. These costs are included in the firm's accounting statements and can be easily quantified. Unlike implicit costs, explicit costs do not reflect opportunity costs or the value of the owner's time.

Unlike Implicit Costs, Explicit Costs