Katie has invested $50,000 in the project. Although she has lost a considerable amount of money in the same project, she refuses to terminate the project because she is sure she will eventually earn a profit. Katie is demonstrating:
A) An operational decision
B) A tipping point
C) An Allostatic load
D) A sunk cost fallacy

Question

Quizplus · Accepted Answer

Katie is demonstrating a sunk cost fallacy by continuing to invest in the project because of the amount already spent, rather than evaluating the project's future viability independently of past losses.

Katie Has Invested $50,000 in the Project