An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials, as opposed to implicit costs, which are those where no actual payment is made. It is possible still to underestimate these costs, however: for example, pension contributions and other "perks" must be taken into account when considering the cost of labour.
Explicit costs are taken into account along with implicit ones when considering economic profit. Accounting profit only takes explicit costs into account.
Famous quotes containing the words explicit and/or cost:
“I think “taste” is a social concept and not an artistic one. I’m willing to show good taste, if I can, in somebody else’s living room, but our reading life is too short for a writer to be in any way polite. Since his words enter into another’s brain in silence and intimacy, he should be as honest and explicit as we are with ourselves.”
—John Updike (b. 1932)
“[M]y conception of liberty does not permit an individual citizen or a group of citizens to commit acts of depredation against nature in such a way as to harm their neighbors and especially to harm the future generations of Americans. If many years ago we had had the necessary knowledge, and especially the necessary willingness on the part of the Federal Government, we would have saved a sum, a sum of money which has cost the taxpayers of America two billion dollars.”
—Franklin D. Roosevelt (1882–1945)