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whats the difference between explicit and implicit cost?

2 Answers

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  • 8 years ago

    The answer you have received is correct, but simply lacks some examples. If you buy a car, the "explicit" cost of the car is the amount of money the dealer charges you. The "implicit" cost involves the gas and insurance. The dealer never quotes you a price "including the cost of gas and insurance." It is your responsibility to know that those extra charges exist. Another example is when you buy a can of soup at the grocery store. The "explicit" cost of the soup is the money you give to the grocery store when you take the can of soup home. But the "implicit" cost involves a can opener, a pot to cook the soup in, the cost of the fuel to heat the soup, and a number of other "extras" which you will need, but which are not mentioned in the price on the grocery store shelf.

  • ?
    Lv 6
    8 years ago

    Explicit costs are clearly stated, implicit costs are hidden/implied.

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