The correct answer is: A. Explicit cost.
Explicit costs are costs that a firm incurs in hiring or purchasing any factor of production. They are costs that are directly paid out by the firm, such as wages, salaries, rent, and interest.
Implicit costs are costs that a firm incurs but does not directly pay out. They are the opportunity costs of using resources that the firm already owns. For example, if a firm owns its own building, the implicit cost of using that building is the rent that it could have earned if it had rented the building to someone else.
Variable costs are costs that vary with the level of output. For example, the cost of raw materials is a variable cost because it increases as the firm produces more output.
Fixed costs are costs that do not vary with the level of output. For example, the cost of rent is a fixed cost because it does not change even if the firm produces more or less output.