Choose the correct statement.
A)Expenditure on a plant that has no resale value is a sunk cost.
B)A sunk cost is irrelevant to a firm's current decisions.
C)A cost that influences a firm's current decisions is the short-run cost of changing its labour inputs.
D)A cost that influences a firm's current decisions is the long-run cost of changing its plant.
E)All of the above.

Question

Quizplus · Accepted Answer

All the statements are correct: A sunk cost is a past expenditure that cannot be recovered and is irrelevant to current decisions. Short-run costs involve variable inputs like labor, while long-run costs involve changing fixed inputs like plant size.

Choose the Correct Statement