Which of the following is true about explicit costs?

Question

Quizplus · Accepted Answer

Explicit costs are out-of-pocket expenses that a firm incurs, such as payments for wages, rent, utilities, and materials. They are different from implicit costs, which are opportunity costs of using resources that are already owned by the firm, such as the foregone rental income from using a building that the firm owns. Explicit costs are used in calculating both accounting and economic profit.

Which of the Following Is True About Explicit Costs