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Factor out the greatest common factor. Assume that variables used as exponents represent positive integers.
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Explicit Costs
Direct, out-of-pocket payments for wages, rent, materials, and other inputs in the production process.
Opportunity Costs
The value of the best alternative foregone when a decision is made to pursue a particular action, essentially the cost of choosing one option over another.
Implicit Costs
The opportunity costs of using resources owned by the firm for its own production, instead of earning income elsewhere.
Explicit Costs
Direct, out-of-pocket payments made for the operation of a business, such as wages, rent, and materials.
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