Legal Definitions - implicit cost

Implicit cost is the cost of not choosing the next best alternative when making a decision. It is the opportunity cost of choosing one option over another. For example, if a person decides to start their own business instead of taking a job, the implicit cost is the salary they would have earned if they had taken the job.

Another example of implicit cost is when a company decides to use its own resources to produce a product instead of outsourcing it. The implicit cost is the profit they could have made if they had used those resources to produce a different product or service.

Implicit cost is important to consider when making decisions because it helps to determine the true cost of a choice. It is not always easy to calculate, but it is important to take into account when making important decisions.