An example of an implicit cost is the foregone income that a business owner-manager could have earned working for someone else.

Question

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Implicit costs are the opportunity costs of using resources owned by the firm for its own production rather than renting or selling those resources to others. The foregone income that a business owner-manager could have earned working for someone else is an example of an implicit cost because it represents the opportunity cost of the owner's time and skills.

An Example of an Implicit Cost Is the Foregone Income