The larger the implicit cost of a business:
A)the greater accounting profit will be.
B)the smaller economic profit will be.
C)the more successful the venture will be.
D)the smaller the explicit cost will be.

Question

Quizplus · Accepted Answer

Implicit costs are the opportunity costs of using resources owned by the business for its own use rather than selling or renting them out. Therefore, the larger the implicit costs, the smaller the economic profit will be, as economic profit takes into account both explicit and implicit costs, unlike accounting profit which only considers explicit costs.

The Larger the Implicit Cost of a Business