An example of an explicit cost of production would be:

Question

Quizplus · Accepted Answer

The cost of glass for a lens manufacturer is an explicit cost of production because it involves a direct financial payment for a necessary input in the production process. Option A is an opportunity cost, and option C is an implicit cost as it involves giving up the interest payment that the entrepreneur could have earned if they had kept their savings invested elsewhere. Option D is not correct as there is a clear example of an explicit cost in option B.

An Example of an Explicit Cost of Production Would Be