One difference between implicit costs and explicit costs is that
A) implicit costs are included in accounting profits,whereas explicit costs are not.
B) implicit costs are included in economic profits,whereas explicit costs are not.
C) explicit costs are included in accounting profits,whereas implicit costs are not.
D) explicit costs are included in economic profits,whereas implicit costs are not.
E) explicit costs involve opportunity costs,whereas implicit costs involve a monetary transaction.

Question

Quizplus · Accepted Answer

Explicit costs are actual cash payments (or monetary transactions) a firm makes to outsiders for inputs, and they are included in accounting profits. Implicit costs, on the other hand, represent the opportunity costs of using resources that the firm already owns and are not included in accounting profits but are considered when calculating economic profits.

One Difference Between Implicit Costs and Explicit Costs Is That