What is Explicit and Implicit cost

Explicit cost: Explicit cots are the paid-out costs. They consist of the salaries and wages paid to the employees, price of row and semi-finished materials, over head costs and payments is depreciation and sinking fund accounts. These are firm`s account expense.

Implicit Cost: Implicit costs are costs of self-owned and self-employ resources such as salary of the proprietor or return on the entrepreneur`s own investment. These costs are frequently ignored in calculating the expenses of production.