Arjun quit his job in an MNC and opened up a fast food shop with his savings. Which of the following is an implicit cost?

Cost of setting up the shop

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Cost of raw materials

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Forgone income

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Potential returns of investing the savings

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Solution

The correct options are
C
Forgone income

D
Potential returns of investing the savings

The income that he gave up and his potential returns on the investment of his savings are indirect costs. These are implicit costs.

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Arjun quit his job in an MNC and opened up a fast food shop with his savings. Which of the following is an implicit cost?

The correct options are C Forgone income D Potential returns of investing the savings The income that he gave up and his potential returns on the investment of his savings are indirect costs. These are implicit costs.

The correct options are
C
Forgone income

D
Potential returns of investing the savings

The income that he gave up and his potential returns on the investment of his savings are indirect costs. These are implicit costs.