Sarah places a $110 value on seeing the Richmond Tigers play in the Grand Final. She purchases a ticket to the game for $60, but when she arrives at the game she discovers that her ticket is missing. If Sarah purchases a ticket from a ticket scalper for $95, she is best demonstrating the principle that:

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. Sarah's initial $60 ticket is a sunk cost, and her decision to buy another ticket for $95 is based on her current valuation of the game ($110), not on the sunk cost.

Sarah Places a $110 Value on Seeing the Richmond Tigers