[amp_mcq option1=”Wages of the labour” option2=”Charges for electricity” option3=”Interest on owned money capital” option4=”Payment for raw material” correct=”option3″]<\/p>\n
The correct answer is C. Interest on owned money capital.<\/p>\n
An implicit cost is a cost that a business incurs but does not directly pay out. It is the opportunity cost of using resources that could be used for other purposes. In the case of interest on owned money capital, the business is not paying out money to a lender, but it is forgoing the opportunity to earn interest on that money by investing it elsewhere.<\/p>\n
The other options are all explicit costs, which are costs that a business directly pays out. Wages of the labor is the cost of hiring workers. Charges for electricity is the cost of using electricity to power the business’s operations. Payment for raw material is the cost of purchasing raw materials used in the production process.<\/p>\n
Implicit costs are important to consider when making business decisions, as they can have a significant impact on a business’s profitability. By understanding and accounting for implicit costs, businesses can make more informed decisions about how to allocate their resources.<\/p>\n","protected":false},"excerpt":{"rendered":"
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