Which of the following is an implicit cost?
(i) a business owner forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm
(ii) interest on debt
(iii) uncollected revenue
A)(i) only
B)(i) and (ii)
C)(ii) and (iii)
D)(i), (ii) and (iii)

Question

Quizplus · Accepted Answer

Implicit costs are opportunity costs that arise when a business owner or firm forgoes an opportunity to earn income or profit. Option (i) is an explicit example of this, while options (ii) and (iii) are explicit costs incurred by the business. Therefore, the implicit cost is only (i).

Which of the Following Is an Implicit Cost