In 1632, the Virginia Legislature decreed that all love apples must be sold for $1 per bushel (no more, no less). At the time, Mr. McKintoch had 1,000 bushels of love apples ready for harvesting. His sunk costs were $1,100, and his total costs (including sunk costs) would have been $1,800 if he harvested. If McKintoch decided not to harvest because he did not think he could cover his total costs, he

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Mr. McKintoch made the wrong decision; the sunk cost component of total cost should not have affected his decision to harvest. Sunk costs are irrelevant when making decisions about future actions. Since the legislature had mandated the selling price of love apples, he would have earned a profit by harvesting them and selling them for the prescribed price, even though his total costs exceeded the revenue he would receive. He should have only considered his variable costs and potential revenue while making the decision.

In 1632, the Virginia Legislature Decreed That All Love Apples