Economic cost concepts

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Explicit Costs

Are usually obvious and readily
quantifiable monetary payments a firm
makes to another party to obtain
resources.

IMPLICIT COSTS

May be considered as the monetary income a firm
sacrifices when it uses its own resources
rather than using these resources as those that
can be supplied to the open market for
alternative uses.

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Economic cost concepts

1.

2. Explicit Costs Are usually obvious and readily quantifiable monetary payments a firm makes to another party to obtain resources.

3. IMPLICIT COSTS May be considered as the monetary income a firm sacrifices when it uses its own resources rather than using these resources as those that can be supplied to the open market for alternative uses.