Separable costs that do not differ between alternatives are irrelevant for decision making.

Name: Separable costs that do not differ between alternatives are irrelevant for decision making.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Separable costs that do not differ between alternatives are called common costs, and they are irrelevant for decision making because they do not change regardless of which alternative is chosen. Only differential (or incremental) costs and benefits should be considered when making a decision.

Separable Costs That Do Not Differ Between Alternatives Are Irrelevant