An Implicit Cost Is Defined As

question 50

Multiple Choice

An implicit cost is defined as:

• A)the opportunity cost of using a resource that is not explicitly paid out by the firm.
• B)the difference between an input's explicit cost and its actual cost.
• C)the amount by which economic profit exceeds accounting profit.
• D)the amount by which the money spent on an input to production exceeds its opportunity cost.

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Definitions:

Expiration Date

The date on which an option, futures contract, or insurance policy loses its validity or expires.

Obligated

Required to do something based on legal or moral duties.

Right To Buy

A legal provision giving tenants the opportunity to purchase the home they are renting, often at a discount.

Real Option

A choice made available to managers regarding investment opportunities, considering the flexibility to adapt to market changes.