A farmer takes a farm on rent and carries on farming with the help of family members.
A farmer takes a farm on rent and carries on farming with the help of family members. Identify explicit and implicit costs from this information. Explain.
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In the given example, the farmer is using the services of his family members for farming. Farming services are not hired or purchased from the market. So these are implicit cost' Rent paid for the farm taken on rent in explicit cost because it is the expense incurred by the producer for purchasing the inputs from the market.
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