Unlike implicit costs, explicit costs:
A) reflect opportunity costs.
B) include the value of the owner's time.
C) are not included in the accounting statement of the firm.
D) are actual cash payments.

Question

Quizplus · Accepted Answer

Explicit costs are actual cash payments made by the firm, such as wages and salaries, rent, and utilities. They are easily identified in the accounting statements of the firm and are deducted from revenue to calculate profit. Unlike implicit costs, which reflect opportunity costs, explicit costs involve actual cash outflows.

Unlike Implicit Costs, Explicit Costs