Final answer:
Cost structure refers to how a company uses explicit costs versus implicit costs in its operations.
Step-by-step explanation:
The term cost structure refers to how a company uses explicit costs versus implicit costs in its operations. Explicit costs are out-of-pocket costs, such as wages and rent, while implicit costs represent the opportunity cost of using resources that the firm already owns, such as the owners' contribution of time or using a part of their home as a retail store. Cost structure is important for businesses to understand and manage, as it directly impacts profitability and decision-making.