A company's expenditure on raw materials is regarded as?

  • A explicit cost
  • B implicit cost
  • C prime cost
  • D average cost
jamb 2020economics

The correct answer is A. explicit cost

Explicit costs are direct payments incurred by a firm in the course of running a business.

These are costs actual and physical costs incurred by a firm.

Examples of explicit costs include wages, lease payments, utilities, raw materials, and other direct costs.

Previous question Next question