Which of the following most completely describes the cost to a firm associated with the use of its resources in a particular way?
A)Its monetary outlay for inputs
B)Its explicit cost
C)The implicit cost of not renting its own resources
D)The opportunity cost of its resources

Question

Quizplus · Accepted Answer

The opportunity cost is the foregone alternative use of resources when they are used in a particular way. This cost includes both explicit costs (monetary outlays) and implicit costs (the foregone opportunity of not renting out its own resources). Therefore, D is the most comprehensive and accurate description of a firm's cost associated with using resources in a particular way.

Which of the Following Most Completely Describes the Cost to a Firm