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:
“... the Ovarian Theory of Literature, or, rather, its complement, the Testicular Theory. A recent camp follower ... of this explicit theory is ... Norman Mailer, who has attributed his own gift, and the literary gift in general, solely and directly to the possession of a specific pair of organs. One writes with these organs, Mailer has said ... and I have always wondered with what shade of ink he manages to do it.”
—Cynthia Ozick (b. 1928)
“To call a posit a posit is not to patronize it. A posit can be unavoidable except at the cost of other no less artificial expedients. Everything to which we concede existence is a posit from the standpoint of a description of the theory-building process, and simultaneously real from the standpoint of the theory that is being built.”
—Willard Van Orman Quine (b. 1908)