Which of the Following Is an Implicit Cost

question 171

Multiple Choice

Which of the following is an implicit cost?
(i) a business owner forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm
(ii) interest on debt
(iii) uncollected revenue

• A)(i) only
• B)(i) and (ii)
• C)(ii) and (iii)
• D)(i), (ii) and (iii)

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Definitions:

Nash Equilibrium

A concept in game theory where no player can gain by changing their strategy while the other players keep theirs unchanged, indicating optimal decision-making among competitors.

Preempted Entry

A strategy employed by existing firms in a market to deter new competitors from entering the market, often through barriers to entry or aggressive competitive practices.

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies if other players keep theirs unchanged; it represents a state of mutual strategy optimization.

Extensive Form

A representation of games (in game theory) that illustrates the sequence of moves, available strategies, and potential outcomes in a tree diagram.