What's the difference between explicit and implicit costs?

Question

Quizplus · Accepted Answer

Explicit costs require the firm to make an actual outlay of money, such as purchasing supplies or paying wages to employees. Implicit costs, on the other hand, are opportunity costs that arise from using resources for a particular activity instead of other potential activities. These costs are often less obvious and include things like the opportunity cost of using the owner's time to run the business instead of pursuing another job that pays a higher salary. Explicit and implicit costs are both important for firms to consider when making decisions, as they can impact the profitability and viability of the business.

What's the Difference Between Explicit and Implicit Costs