Explicit cost

Cost paid in money.

Implicit Cost

an opportunity cost incurred when a firm uses its factors of production for which it does not make a direct money payment.

Economic depreciation

an opportunity cost of a firm using capital that it owns—measured as the change in the market value of the capital over a given time period.

Normal Profit

The return to entrepreneurship (normal profit is part of a firm’s opportunity cost because it is the cost of not running another firm.)

Economic profit

a firms total revenue minus total cost (these costs include opportunity cost.)