A firm's explicit costs include all of the following except
A) rents paid for the use of buildings
B) interest paid on borrowed money
C) wages paid to hired labor
D) normal profit

Question

Quizplus · Accepted Answer

Normal profit is considered an implicit cost, not an explicit cost. Explicit costs are direct payments made to others in the course of running a business, such as rents, interest, and wages. Normal profit, however, is the minimum profit necessary for a company to remain competitive in the market and is not a direct outlay of cash.

A Firm's Explicit Costs Include All of the Following Except