The cost incurred by a firm through the foregone earnings on capital invested is a(n) _____ cost.

Question

Quizplus · Accepted Answer

Implicit costs are those costs that represent the opportunity costs associated with a firm's resources that are used in production but are not directly paid for. In this case, the foregone earnings on capital invested represent an opportunity cost, as the firm could have potentially earned income by investing that capital elsewhere.

The Cost Incurred by a Firm Through the Foregone Earnings