Question

A shopkeeper explains to you that she keeps down the cost of running her business because her husband works in the shop for free. The consequence of the shopkeeper not paying her husband is that:

Answer 1

explicit cost is kept down, but not the implicit

Step-by-step explanation:

As we know that there is two cost i.e. explicit cost and the other one is implict cost. The explicit cost is the cost that are spent like out of pocket expenses i.e. salaries & wages, etc. On the other hand the implicit cost is the cost that are spent on diversifying the business

Now as per the given situation, the above is the answer and also the explicit costs are classified into fixed and variable costs while doing the business