How can one apply accounting costs to economic costs?
1 Answer
Sep 5, 2015
Accounting costs are part of Economic cost.
Explanation:
Accounting costs are payments made by an entrepreneur to the suppliers of various productive factors. This is explicit cost also know as nominal cost.
Accounting cost = Explicit Costs (or Accounting cost) + Implicit costs
Implicit costs are those costs incurred by the producer when he employs his own factor service like land, labour and capital in his business.
