An example of an implicit cost is
A) the wages paid to workers.
B) the interest on business loans.
C) the imputed rent on a store owned by the firm.
D) the materials used to produce the product.

Question

Quizplus · Accepted Answer

Implicit costs are opportunity costs that arise from the use of resources owned by the firm itself - resources that could have been used for alternative purposes. In this case, imputed rent on a store owned by the firm is the best example of an implicit cost as it represents the opportunity cost of not renting out the store to another tenant and receiving rental income. Wages paid to workers and materials used to produce the product are explicit costs, while interest on business loans is an explicit cost for the firm that borrowed the money, but not for the firm that lends the money.

An Example of an Implicit Cost Is