An example of implicit costs is the:
A) bad-debt liabilities arising out of excessive sales on credit.
B) wages paid to the owners' children.
C) opportunity cost of owner-supplied capital and labor that is not recognized by accountants.
D) prices paid for purchased inputs.
E) the alternative uses for money that could be borrowed.

Question

Quizplus · Accepted Answer

Implicit costs are the opportunity costs of using resources owned by the firm or its owners, which include owner-supplied capital and labor. These costs are not recognized by accountants and do not involve any monetary outlay. The other options are explicit costs, which involve actual cash payments.

An Example of Implicit Costs Is The