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Multiple choice

Which of the following is an implicit cost?

  1. Rent of warehouse

  2. Interest on loan from brother

  3. Interest on capital

  4. Interest on bank loan

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Implicit cost is the cost of self owned resources. Interest on capital is one of its examples. All others are explicit costs, i.e. payment made to outsiders.

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