Case study:

Assume that youhave taken 12 months' leave without pay from your full-time job as a dressmaker and set up a business ironing and repairing clothes. You have taken out a 12-month lease on a small shopfront in a suburban shopping centre. You have bought all the equipmentyou need for your business and arranged the fit-out of your premises to accommodate your work requirements. You have paid for these set-up costs out of your previous savings. You will not be able to buy any more equipment during the next 12 months. For the year, your total explicit costs are $25 500, and your implicit costs are $55 000.

Give some examples of your implicit costs and explain why you chose them!

Nb: I think its the opportunity cost of foregone salary and any interest embedded into it but not too sure if correct hence you can add more inputs in that line. Thanks