Define explicit cost and implicit cost
Briefly describe the term explicit cost and implicit cost?
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Explicit cost is the cost that is outside to the business such as rent, wage and materials. It gives obvious depiction of the cash outflow from business that is employed to reduce the end outcome of profitability. This straightly influences the revenue of the company. Implicit cost is the end result of one person who tries to satisfy his wants in search of an activity that gives no reward to him through money or any other form of payment. It consists of reimbursement and satisfaction. For instance: goodwill. It is not counted up in terms of money and it is indirect insubstantial cost.
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In Wealth of Nations by Adam Smith, opined that the productivity of labor based primarily on: (w) workers’ education. (x) divisions of labor. (y) technologically advanced machines. (z) suitable wage rates. Discover Q & A Leading Solution Library Avail More Than 1443133 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1937160 Asked 3,689 Active Tutors 1443133 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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