Implicit costs are considered the opportunity costs of utilizing resources that a firm already owns for production instead of renting, selling, or lending them, essentially representing the "payments" or costs of using self-owned resources. They are not out-of-pocket expenses but are crucial for calculating economic profit.

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Implicit Costs Are

Question 16

Multiple Choice

Implicit costs are:

A) Equal to total fixed costs.
B) Comprised entirely of variable costs.
C) "Payments" for self-employed resources.
D) Always greater in the short run than in the long run.

Correct Answer: