Suppose you decide to open a new ice cream business, called, "I-LOVE-ICE-CREAM" in Riverside, California. What are (1) explicits and (2) implicit costs incurred, as you open and run this business?
EXPLICIT COSTS
These are the costs that are explicitly paid out and are out of pocket expenses for the firm.
IMPLICIT COSTS
These are the opportunity costs of the resources that are already owned by the firm and are used in business.
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