Question

Which one out of the following costs is implicit cost?

विकल्प

• payment made for advertisement

• wages and salaries

• payment made for the use of raw material

• rent for self-owned factory used in production

Answer 1

rent for self-owned factory used in production

Explanation:

The opportunity cost of using resources that the company currently has as opposed to renting or purchasing them from third parties is known as the implicit cost. Direct payment is not required for these expenses. The money the owner could have made if the factory had been rented out rather than used is what is known as rent for a self-owned factory.