Sunk costs:
A) can be ignored because they have no effect on marginal costs.
B) should be taken into consideration when choosing the best level of an activity.
C) should not be ignored because they lead to higher marginal costs.
D) can be ignored because they don't have to be paid by the decision maker.

Question

Quizplus · Accepted Answer

Sunk costs are past costs that have already been incurred and cannot be recovered, so they do not affect future decisions or marginal costs.

Sunk Costs