An example of an implicit cost is
A) a payment on the loan for a piece of equipment not in use.
B) a payment on an electricity bill.
C) wages paid to employees.
D) gasoline costs.
E) forgone wages.

Question

Quizplus · Accepted Answer

Implicit costs are opportunity costs, which are the benefits that are forgone by not choosing the next best alternative. Forgone wages are an example of an implicit cost because if an entrepreneur uses their own labor in a business, they are forgoing the opportunity to earn wages elsewhere. Unlike explicit costs, which are monetary costs, implicit costs are not immediately apparent and not shown in accounting records.

An Example of an Implicit Cost Is