A person borrows and opens a shop. The shop premises are owned by him. Identify the implicit cost and explicit cost from this information.

Nikita Chetry
Latest Answer: 1 month ago
In: Commerce

A person borrows and opens a shop. The shop premises are owned by him. Identify the implicit cost and explicit cost from this information.

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1 Answers

Answered By Anita Sahani
Answer: 1 month ago

(i) Interest on borrowed money is an explicit cost because interest is paid to another (lender of money).(ii) The rent of the shop premises owned by the shopkeeper is an implicit cost, because rent is... Read More

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