Purchase Solution

Implicit and Explicit costs

Not what you're looking for?

Ask Custom Question

Should the club cover explicit and implicit costs? Imagine that you are asked to consult with a drama club that puts on a play every year. The club asks you: How much should we charge for tickets if we want to cover our costs? You begin by listing the club's explicit costs and implicit costs and then make a recommendation whether ticket prices should cover the explicit costs, the implicit costs, or both explicit and implicit costs. Give the club three examples of each type of cost. What is your recommendation for ticket pricing: should they cover explicit costs, implicit costs, or both? Why?

Purchase this Solution
Solution Preview

Explicit cost: cost of renting theatre, cost of props and costumes and cost of equipments (such as lighting, sound system etc.)

Implicit cost: the opportunity cost of actors (in other words, say if they decided to leave the club and teach at a school, then what they make from ...

Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Business and Economic profits

    Normal Return on Investment is the implicit costs i.e. $25000 The solution calculates implicit costs, explicit costs, economic profits and normal profits in the given case.

  • Explicit and Implicit cost

    53501 Explicit and Implicit Cost John moved his office from a building, he was renting downtown to the carriage house he owns in back of his house. How will his costs change? a. Explicit and implicit costs rise b.

  • Explicit Cost, Implicit Cost or Not Needed to Be Reflected

    What is his explicit and implicit cost. I know that the (5% of 2000) is implicit cost. $30000 + (10% of 3000) is the explicit cost. However i am confuse. Do i need to add the cost of the machine of $5000 to explicit or implicit cost?

  • Microeconomics: Variable, Fixed, Explicit and Implicit costs

    321174 Microeconomics: Variable, Fixed, Explicit and Implicit costs A firm's costs can be divided into fixed costs and variable costs. Identify each of the following as either a fixed or variable cost.

  • Calculating the accounting and economic costs

    and all other explicit costs, while accounting costs include costs for which actual payment is made.

  • Calculating Implicit and Explicit Costs

    What are the total explicit, total implicit, and total economic costs in 2010? Explicit costs are costs for which actual payments are made.

  • Price elasticity of demad, determinants of elasticity

    A firm with total revenues of $150 million, explicit cost of $90 million, and implicit costs of $30 million b. A firm with total revenue of $125 million, explicit costs of $100 million, and implicit costs of $30 million c.

  • explicit cost or an implicit cost

    Rent of the electricity meter is fixed and the rest of the cost is variable. This solution assesses the examples as explicit costs or implicit costs.

  • distinguish between explicit & implicit costs

    366059 Distinguish between explicit & implicit costs 1- what is the law of diminishing returns? Give discriptive example? 3- distinguish between explicit & implicit costs, giving example of each.

View More Related Solutions