In economics, what do we call the costs associated with the use of resources that a firm already owns?

In economics, the costs associated with the use of resources that a firm already owns are referred to as implicit costs. These costs represent the opportunity costs of the owner's time, capital, and other resources that could have been employed elsewhere. When a firm utilizes its own resources to produce goods or services, it is forgoing the potential income or benefits that could have been gained from using those resources in an alternative way.

For instance, if a business owner uses a building they own to operate their business, the implicit cost would include the potential rent they could have received if they had leased the space to another party. This concept highlights the importance of considering not only actual monetary expenditures (which are explicit costs) but also the value of what is sacrificed when resources are used in a specific way. Understanding implicit costs is crucial for making informed decisions about resource allocation and overall business strategy.