alleryStart learning →Implicit costs are described as more subtle than explicit costs but:
AJust as important
BFar less important
CNever worth counting
DImpossible to define
Answer & Solution
Correct answer: A. Just as important
1. Subtlety is not the same as insignificance.
2. Explicit costs are out-of-pocket costs, that is, actual payments.
3. Implicit costs are more subtle, but just as important.
4. Ignoring them would overstate how well a business is really doing.
5. That is exactly why economic profit includes them.
_Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 7 'Production, Costs and Industry Structure', sections 7.1-7.4_
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