Enter the accounting costs ($) and the implicit costs ($) into the Economic Cost Calculator. The calculator will evaluate and display the Economic Cost ($).
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Economic Cost Formula
The following formula is used to calculate the Economic Cost ($).
EC = AC - IC
- Where EC is the Economic Cost ($)
- AC is the accounting costs ($)
- IC is the implicit costs ($)
To calculate the economic cost, subtract the implicit cost from the accounting costs.
How to Calculate Economic Cost?
The following example problems outline how to calculate Economic Cost ($).
Example Problem #1:
- First, determine the accounting costs ($). The accounting costs ($) is given as 6,500.
- Next, determine the implicit costs ($). The implicit costs ($) is provided as 1,500.
- Finally, calculate the Economic Cost ($) using the equation above:
EC = AC – IC
The values given above are inserted into the equation below:
EC = 6500 – 1500 = 5000 ($)
Example Problem #2:
The variables needed for this problem are provided below:
accounting costs ($) = 1,500
implicit costs ($) = 200
Entering these values and solving gives:
EC = AC – IC = 1300.00 ($)
