Production and cost — Economics STD 12 Humanities & Commerce — Question
Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsProduction and cost2 Marks
Question
Distinguish between explicit cost and implicit cost and give examples.
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Answer
Explicit cost refers to the actual purchase of inputs, or, actual money expenditure on inputs. Example: Expenditure on buying raw materials. Implicit cost refers to the estimated value of the inputs provided by the owner. Example: Estimated salary of the owner.
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