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 later decisions
C)should determine the rational course of action in the future
D)has the most impact on profit-maximizing decisions
E)influences rational decision makers

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been incurred and cannot be recovered, regardless of any future decisions. Therefore, it should not be considered in making current or future decisions, as it is irrelevant to those decisions.

A Sunk Cost Is One That