Which of the following is an example of an implicit cost of production?
A) cost of raw materials
B) cost of labor
C) opportunity cost
D) fixed costs

Question

Quizplus · Accepted Answer

Implicit costs are opportunity costs that arise when a firm uses resources it already owns to make a product, and they do not involve any direct monetary expenses. Hence, the cost of raw materials (A), cost of labor (B) and fixed costs (D) are explicit costs, while the opportunity cost (C) is an example of an implicit cost.

Which of the Following Is an Example of an Implicit