Explicit Costs and Implicit Costs

Explicit costs are the moneys paid for the input of a product. Implicit costs are the costs of the four factors of production that are involved in the making of a product. (PARKIN et. al. , 2008). Explicit costs are opportunity costs that money capital is used to pay for the resources that the firm uses. Implicit costs are the costs of the choices and action that a firm forgoes. They subdivide the opportunity costs of a firm. Explicit costs are the money costs of an alternative forgone in order to produce a product. Implicit costs are the costs to an entrepreneur of a choice forgone.

List of references:

· PARKIN, M, POWELL, M, MATTHEW, K, 2008. Economics (7e). Essex, England: Pearson.