Question

What would be an example of an implicit cost of production? O the cost of lost income a student could have earned had they not gone to university the cost of raw materials for producing bread in a bakery the cost of a delivery truck in a business that rarely makes deliveries the cost of employee training programs

Answer 1

Q1
Answer
Option 1
Implicit cost is an opportunity cost of the activity and it is the best benefit forgone because of the activity so it is the lost income as a student

The other options are explicit costs as these costs are directly paid and not the opportunity costs.
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Q2
ANswer
Option 3
A natural monopoly is a firm with the economics of scale so one firm can produce at lower ATC than two or more firms in the market so it is not beneficial to use antitrust laws and government should provide subsidy to the firm to produces at MC=P
because ATC is decreasing means MC<ATC and MC=P, P<ATC then the profit is
Profit =(P-ATC)*Q
Profit is negative
so the government should pay the losses.