Production and cost — Economics STD 11 Commerce — Question
CBSE BoardEnglish MediumSTD 11 CommerceEconomicsProduction and cost3 Marks
Question
Distinguish between explicit cost and implicit cost and give examples.
✓
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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