an individual is both the owner and the manager of a shop taken on rent . Identify implicit cost and explicit cost from this information . Explian.
Implicit cost is the cost which is hidden and is not shown as a separate cost. on the other hand, explicit cost is the cost which is shown as a separate cost and expenditure is incurred on it.In this case, the salary of the person who himself is the owner as well as manager is an imputed cost because working on his own shop involves an opportunity cost in the form of salary which he could have earned by working on some other's shop. However, rent by him is an explicit cost as it is shown and paid to someone else in the form of money.