Explicit costs a. Require an outlay of money by the firm. b. Include all the firm’s opportunity costs. c. Include income that is forgone by the firm’s owners. d. All of the above are correct.
Answer: a. Require an outlay of money by the firm.
Explanation:
Explicit cost involves where money is paid directly to others when running a business. An example is payment of materials, rent, salaries. It requires an outlay of money by the firm.
