Definition:TheImplicit Cost, also called asImputed Costis the implied cost that does not take a form of cash outlay, and neither is recorded in the books of accounts. The opportunity cost is the important example of implicit cost wherein the expected returns from the second best alternative act...
One example of an implicit cost is when a company may be able to increase revenue by using resources that are not already at capacity. Read Implicit Cost Definition, Types & Examples Lesson Recommended for You Video: Transaction Costs in Economics | Theory, Types & Examples Video: Product &...
to the production of a specific good or service but that is indirectly related to a variety of goods or services. For example, the cost of administering a large company is an indirect cost that must be spread over a number of products or services. Also calledoverhead. Comparedirect cost. ...
1.The act of implicating or the condition of being implicated. 2.The act of implying or the condition of being implied. 3.Something that is implied, especially: a.An indirect indication; a suggestion. b.An implied meaning; implicit significance. ...
the costs (EXPLICIT COSTS and IMPLICIT COSTS) incurred by firms for the use of FACTOR INPUTS in producing their OUTPUTS. Compare SOCIAL COSTS. Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005 Want to thank TFD for its existence? Tell a friend about us,...
“An implicit cost is any cost that results from using an asset instead of renting it out or selling it.” Implicit costs are the opportunity costs of using resources that a company already owns. If it does or doesn’t do something, the company is giving up something else. That ‘else’...
Switching Cost Industry Example – Competition Analysis What is an Example of High Switching Costs? Expand + What are Switching Costs? Switching Costs describe the burden incurred by customers from switching providers, which can reduce churn and act as a barrier to new entrants. What is the Defi...
The above discussions of profits are under the umbrella of accounting profits. Economists’ definition of profits differs from the accounting one. Economic profit considers the effect of opportunity costs or implicit costs. While accounting profit uses only the explicit costs. Opportunity cost is the ...
In contrast,implicit costsare not clearly defined, identified, or reported as expenses. They often deal with intangibles and are described asopportunity costs—the value of the best alternative not accepted. An example of an implicit cost is time spent on one activity of a business that could b...
By contrast, implicit costs are technically not incurred and cannot be measured accurately for accounting purposes. There are no cash exchanges in the realization of implicit costs. Instead, they are opportunity costs, making them synonymous with imputed costs, while explicit costs are considered out-...