The difference between an explicit cost and implicit cost is these two cost occur within the company. Explicit is known as out of pocket cost. It is expenses being paid for a businesses tangible assets such as rent salary and other operating expenses. It reflect a business payment transaction. Implicit cost affects the business profit and performance. It is a cost that an expense that happens although it is not shown. It is known as opportunity cost.
The difference between normal profit and economic profit is that normal happens when a business stays competitive because it total revenue and cost is zero. It has earned enough profit to stay functioning. Economic profit is profit made through the interactions in the business to help with effectiveness and profitability of the company.
Opportunity cost deals with the risk and benefits that will come with an entrepreneur. If you take a greater risk with the business, there may be a greater gain at some point as well as a downfall when you have to borrow many from others to get started.
The difference is Explicit costs is the payments by a firm to purchase the services of productive resources and Implicit costs the opportunity costs associated with a firm’s use of resources that it owns These costs do not involve a direct money payment.
The difference is Economic profit the difference between the firm’s total revenues an its total total costs, including both the explicit and implicit cost component and Normal profit rate zero economic profit, providing just the competitve rate of return on the capital(and labor) of owners. An above-normal profit will draw more entry into the market, whereas a below-normal profit will lead to an exit of investors and capital.
The opportunity cost is impacting on the implicit and explicit cost determine by the normal rate of return and the resources used by the firm.