Question

An implicit cost is defined as:

Answer 1

Answer:

Correct option: The opportunity cost of using a resource that is not explicitly paid out by the firm.

Explanation:

Implicit costs is defined as the opportunity cost of choosing some alternative over other alternative. In other words, it is the amount of money or satisfaction level that is foregone to choose some other alternative.

Economic cost is the sum of implicit costs and the explicit costs.

Economic cost = Implicit cost + Explicit cost