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Economic costs of production differ from accounting costs in that

User Cwohlman
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Answer:

Accounting Cost : Explicit paid costs

Economic Costs : Implicit , Opportunity Cost based, unpaid costs

Step-by-step explanation:

Accounting Cost of production involves only explicit costs of production. Economic Cost of production involve both explicit & implicit costs of production, including the opportunity costs of factor services.

Explicit cost of production is the factor cost paid to other party, for which money exchange takes place. Implicit cost of production is the imputed cost of self owned factor services, for which no monetary exchange (payment) with other party take place.

Eg : Salary paid to staff, rent of business rented property is an Accounting Cost. Self imputed salary of entrepreneur , interest of self financed capital are imputed costs.

User Zweiterlinde
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