Q286
The cost that a firm incurs in hiring or purchasing any factor of production is referred to as
A.
Explicit cost
AnswerB.
Implicit cost
C.
Variable cost
D.
Fixed cost
Answer: Option A
Solution
Answer: Option A
Solution:
The cost that a firm incurs in hiring or purchasing any factor of production is referred to as Explicit cost. An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials, as opposed to implicit costs, where no actual payment is made.