An implicit cost is defined as:
A)the opportunity cost of using a resource that is not explicitly paid out by the firm.
B)the difference between an input's explicit cost and its actual cost.
C)the amount by which economic profit exceeds accounting profit.
D)the amount by which the money spent on an input to production exceeds its opportunity cost.

Question

Quizplus · Accepted Answer

An implicit cost is the opportunity cost of using a resource that is not explicitly paid out by the firm. It is the cost of using a resource in a way that prevents it from being used in its best alternative use. Implicit costs are not reflected in accounting statements, but they are important to consider when making business decisions.

An Implicit Cost Is Defined As