Jenny's parents gave her a used car on the day she started her college career. Jenny paid $834 in repair costs over the past two years. Today, she would like to purchase another car she believes will
Be more reliable in the future. When deciding what price to ask for her car, how should Jenny
Consider the $834?

Question

Quizplus · Accepted Answer

The repair costs of $834 are a sunk cost, meaning they are a cost that has already been incurred and cannot be recovered. When deciding what price to ask for her current car, Jenny should not factor in the sunk cost of the repairs.

Jenny's Parents Gave Her a Used Car on the Day