A firm's explicit costs are

Question

Quizplus · Accepted Answer

Explicit costs are the costs that a firm incurs by paying money for purchasing or hiring services and factors of production such as labor, raw materials, rent, utilities, etc. Thus, the money paid for use of inputs is an explicit cost of the firm.

Answer: D 
 Foregone rents on owner occupied office space are not considered as explicit costs because it is an opportunity cost of the owner rather than a monetary cost incurred by the firm.

Therefore, the correct answer is C.

A Firm's Explicit Costs Are