Eco doubt

What is mean by economic cost explain me by its subject matter and by giving valuable examples . How it is different from accounting cost.

Thanks in advance

Replies (2)

economic cost includes the opportunity cost of using the resources for something else. for example A is a entrepreneur who operates a business. economic cost includes accounting cost + Money he would have earned in the next best alternative. If he uses a building to house his office, accounting cost would be depreciation of building for him. but economic cost is depreciation of the building plus the next best use for the building(for eg. he could have rented the building out to someone else)

the only difference between economic cost n accounting cost is implicit cost it means the opportunity cost which is being sacrificed for eg. after becoming ca u prefer practicing rather than accepting a good package from 'pwc'.... the package u quit is ur opportunity cost for practising as a ca n now ur economic cost is accounting cost plus package u leave........ i think it would be easy for u to understand it

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