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Which of the following is not an explicit cost of production?

A. Wage of self-employed proprietor

B. Depreciation on machinery

C. Returns on owned capital

D. Cost of raw materials

Correct Answer : D.


The option a, b and c are implicit costs because these are the costs on the resources owned by the firm. Optiond is the right answer because cost of raw material is explicit cost as it involves money payment.)

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