Which of the following is an example of an implicit cost?
A)salaries paid to owners who work for the firm
B)interest on money borrowed to finance equipment purchases
C)cash payments for raw materials
D)foregone rent on office space owned and used by the firm

Question

Quizplus · Accepted Answer

Foregone rent on office space owned and used by the firm is an example of an implicit cost, as it represents the opportunity cost of using the space for the firm's own purposes rather than renting it out to someone else and earning rental income. The other options listed in the question are examples of explicit costs, which involve actual cash payments made by the firm for various expenses.

Which of the Following Is an Example of an Implicit