Which of the following is not an explicit cost for the owner of a local pizza parlor?
A) flour
B) cleaning products
C) other uses for the land that the parlor sits on
D) pizza ovens

Question

Quizplus · Accepted Answer

An explicit cost is a cost that involves direct payment of money. Flour, cleaning products, and pizza ovens are all examples of explicit costs because the owner must pay to obtain them. Other uses for the land that the parlor sits on, however, is not an explicit cost because the owner is not directly paying for it. It may be considered an opportunity cost if the owner could have used the land for a more profitable purpose, but it is not an explicit cost.

Which of the Following Is Not an Explicit Cost for the Owner