One Difference Between Implicit Costs and Explicit Costs Is That

question 9

Multiple Choice

One difference between implicit costs and explicit costs is that

• A) implicit costs are included in accounting profits,whereas explicit costs are not.
• B) implicit costs are included in economic profits,whereas explicit costs are not.
• C) explicit costs are included in accounting profits,whereas implicit costs are not.
• D) explicit costs are included in economic profits,whereas implicit costs are not.
• E) explicit costs involve opportunity costs,whereas implicit costs involve a monetary transaction.

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Definitions:

Market Power

The ability of a firm to influence or control the terms and conditions of the market to some degree.

Tacit Collusion

An implicit agreement among competitors to set prices or otherwise behave in a cooperative manner, often without explicit communication.

Market Share

The percentage of total sales in a market captured by a particular company, product, or brand.

Oligopoly

A market structure characterized by a small number of large firms that have significant control over market prices and high barriers to entry, leading to limited competition.