A firm's opportunity cost of using resources provided by the firm's owners is called:
A) sunk costs.
B) fixed costs.
C) explicit costs.
D) implicit costs.

Question

Quizplus · Accepted Answer

The opportunity cost of using resources provided by the firm's owners is referred to as implicit costs. These costs are not reflected in accounting statements, but they are real and represent the foregone opportunities of using those resources elsewhere. Sunk costs refer to costs that have already been incurred and cannot be recovered. Fixed costs are costs that do not vary with the level of output, while explicit costs are those costs that are directly incurred and can be easily quantified.

A Firm's Opportunity Cost of Using Resources Provided by the Firm's