Economic cost refers to the sum total of both explicit cost and implicit cost ______.

Question

KollegeApply · Accepted Answer

Economic cost refers to the sum total of both explicit cost and implicit cost including normal profit. Explanation: Economic Cost = Explicit Cost + Implicit Cost • Explicit cost refers to actual out-of-pocket expenses (for example, salary and rent). • Implicit cost refers to the opportunity cost of using owned resources (such as the owner's time and capital). • Normal profit is considered part of the implicit cost and hence included in the economic cost.

AChoose Your Answer