To the economist, total cost includes:A. explicit and implicit costs, including a normal profit. B. neither implicit nor explicit costs. C. implicit, but not explicit, costs. D. explicit, but not implicit, costs.

Question

Business

Krish Fox

4 January, 00:28

To the economist, total cost includes:A. explicit and implicit costs, including a normal profit. B. neither implicit nor explicit costs. C. implicit, but not explicit, costs. D. explicit, but not implicit, costs.

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Answers (1)

Know the Answer?

Paris Garcia · Answer 1

Option (A) is correct.

Explanation:

For an economist, the total cost includes both the explicit cost and implicit costs.

Explicit costs refers to the costs that are incurred for operating the business such as rent, food, wages, utilities, raw materials, etc.

Implicit costs refers to the costs that are associated with the choice of other alternatives. It is also known as the opportunity cost. Opportunity cost refers to the benefits that are foregone or sacrificed for selecting some other alternatives.

Hence, an economist considers quantitative as well as qualitative costs.