Which of the following can be classified as an implicit cost of production?
A)The cost of raw materials
B)Rent forgone on the office building
C)Interest paid on debt
D)Salary paid to workers

Question

Quizplus · Accepted Answer

Rent forgone on an office building represents the opportunity cost of using the building for production. This is an implicit cost as it is not a direct expense but rather a cost that results from using resources in a particular way. Raw materials (A), interest paid on debt (C), and salary paid to workers (D) are all explicit costs as they are direct expenses incurred in the production process.

Which of the Following Can Be Classified as an Implicit