A sunk cost is one that
A)changes as the level of output changes in the short run.
B)was paid in the past and will not change regardless of the present decision.
C)should determine the rational course of action in the future.
D)has the most impact on profit-making decisions.

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been paid and cannot be recovered, therefore it will not change regardless of the present decision. Sunk costs should not be considered in making rational decisions for the future because they are irrelevant.

A Sunk Cost Is One That