Mika's Manicures leases a space in the local mall for $4,500 a month.For this business,this expense would be considered an:
A) implicit cost of $4,500.
B) explicit cost of $4,500.
C) explicit cost of $0.
D) This is neither an implicit or explicit cost; it is a fixed cost of $4,500.

Question

Quizplus · Accepted Answer

The expense of leasing the space in the local mall is a clear and measurable cost that requires a direct payment of $4,500 per month. This makes it an explicit cost for the business, rather than an implicit cost (which would be a non-monetary opportunity cost) or a fixed cost (which would not vary based on the level of output or activity).

Mika's Manicures Leases a Space in the Local Mall for $4,500