Costs that require a firm to spend money are considered:
A) fixed costs.
B) variable costs.
C) explicit costs.
D) implicit costs.

Question

Quizplus · Accepted Answer

Explicit costs refer to expenses that require a payment or outlay of money by the firm, such as wages, rent, and utilities. Fixed costs and variable costs can both be explicit costs, but not all explicit costs are fixed or variable. Implicit costs, on the other hand, refer to the opportunity costs of resources already owned by the firm, such as the salary a business owner could have earned working for someone else instead of running their own business.

Costs That Require a Firm to Spend Money Are Considered