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Suppose the total cost of producing commodity X is Rs 125000...

This question belongs to Commerce Economics
Economics
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Suppose the total cost of producing commodity X is Rs.125000. Out of this cost, implicit cost is Rs.35000 and normal profit is Rs.25000. What will be the explicit cost of commodity X?

Answer & Solution
Correct Answer: Option B
125000-25000-35000 = 65000 = explicit cost.
Total cost = implicit cost + explicit cost.
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4 Comments
Sahidul Islam
Sahidul Islam 4 years ago
It should be 90000
Zia Ullah
Zia Ullah 4 years ago
Explicit cost = Total Cost - Implicit cost
Explicit cost = 125000 - 35000 = 90000, I think this is the right answer
Kunj Masarani
Kunj Masarani 5 years ago
It should be 90000 as normal profit is not included in cost of production. So, explicit cost=125000-35000=90000
Rashmi Chetry
Rashmi Chetry 7 years ago
Then it should be 90000. As we are given the total cost not the total revenue thus didn't understand the ductuction of profits
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