Explicit costs
A) measure the opportunity costs of the business owners.
B) are always fixed in the short run.
C) measure the payments made to the firm's factors of production.
D) are always variable in the short run.
E) determine accounting profit but not economic profit.

Question

Quizplus · Accepted Answer

Explicit costs are the payments made to the firm's factors of production, such as wages, rent, and supplies. These costs are also known as accounting costs because they are easily measurable and recorded in accounting statements. They represent actual out-of-pocket expenses that a business incurs in order to produce its goods or services.

Explicit Costs