The choices listed below involve costs to the firm.For which is the implicit cost potentially different than its explicit cost?
A)The use of firm-owned assets.
B)The services of hired workers.
C)The use of rented land.
D)The interest paid on borrowed money.
E)The purchase of raw materials used in production.

Question

Quizplus · Accepted Answer

Implicit costs are the opportunity costs of using resources owned by the firm, such as firm-owned assets, which could have been used elsewhere. Explicit costs involve direct monetary payments, like wages, rent, interest, and raw material purchases.

The Choices Listed Below Involve Costs to the Firm