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Managerial Economics · Quiz 1 · 19 Jul 2026 · May 2026 term

Question 6: What is the implicit cost?

Question 6

+1 markOne correct option

Suppose that you own and manage your own business and you are contemplating whether you should continue to operate over the next year or go out of business. If you remain in business, you will need to spend £100,000 to hire the services of workers and £80,000 to purchase supplies; if you go out of business, you will not need to incur these expenses. In addition, the business will require 80 hours of your time every week. The best alternative to managing your own business is to work the same number of hours in a corporation for an income of £75,000 per year.
Based on the above data, answer the given subquestions.

What is the implicit cost?

  1. A

    75,000

  2. B

    180,000

  3. C

    255,000

  4. D

    100,000

Show answer

Correct answer

  • A

    75,000

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Question 6 of 22 in the IIT Madras BS Managerial Economics (Managerial Economics) Quiz 1 paper sat on 19 Jul 2026, in the May 2026 term (Managerial Economics 16 Jul 26). It carries 1 mark.

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