Question on: JAMB Economics - 1995

The opportunity cost of using resources a producer already owns, but for which they don't pay an explicit cost, is an implicit cost. * **Implicit costs** are the opportunity costs of using resources that the producer already owns. These costs are not reflected in the firm's accounting records. * **Fixed costs** are costs that do not vary with the level of output. * **Variable costs** are costs that change with the level of output. * **Prime cost** is the sum of direct materials and direct labor costs.