|Book Edition||7th Edition|
What explicit and implicit costs might the owner of this salon incur? His explicit costs include chairs, rent for the shop, scissors, the rinse sinks, electricity, blow dryers, and so on. The implicit costs include the salary he could make at another job or the leisure he could enjoy if he retired.
(A) Explicit cost (the financial cost that could be directly traced back to the operation of the saloon)
(B) Implicit cost ( the opportunity cost of running the saloon; the next best alternatives foregone)
The attempt is as follow :