Opportunity Costs: The cost of not pursuing other opportunities. For example the opportunity cost of starting your own business may be the cost of the earnings you could have made working for someone else.
Implicit Costs: The opportunity cost of a firm made available to the firm with no direct cash outlays. An example would be an owners direct labor in his business unpaid, versus what he could be paid working for someone else.
Explicit Costs: Costs paid directly to employees, rents, or other direct capital costs to operate the business.
Economic Cost: Economic cost will always be higher than accounting costs because it includes opportunity costs.
Account Costs: Accounting costs are all explicit costs
Economic Profit: Profit after accounting costs and economic costs.
Economic Losses: Financial losses and damages that can only be seen on the balance sheet. For example, manufacturing downtime due an electrical interruption caused by a line breakage
Opportunity Costs: The cost of not pursuing other opportunities. For example the opportunity cost of starting your own business may be the cost of the earnings you could have made working for someone else.
Implicit Costs: The opportunity cost of a firm made available to the firm with no direct cash outlays. An example would be an owners direct labor in his business unpaid, versus what he could be paid working for someone else.
Explicit Costs: Costs paid directly to employees, rents, or other direct capital costs to operate the business.
Economic Cost: Economic cost will always be higher than accounting costs because it includes opportunity costs.
Account Costs: Accounting costs are all explicit costs
Economic Profit: Profit after accounting costs and economic costs.
Economic Losses: Financial losses and damages that can only be seen on the balance sheet. For example, manufacturing downtime due an electrical interruption caused by a line breakage
Zero Economic Profit:
Updates to follow.