What is the difference between explicit costs and implicit costs? List three examples each of explicit costs and implicit costs that may be experienced by a small business

Question

What will be an ideal response?

Answer 1

Explicit costs are costs that involve spending money. Implicit costs are nonmonetary opportunity costs. Explicit costs experienced by a small business may include wages, utility costs, and rent. Implicit costs experienced by a small business may include foregone salary, foregone interest, and economic depreciation.