Which of the following best describes sunk costs?
A) They are costs that have already been incurred and cannot be recovered.
B) They are costs that should be included when weighing the marginal costs of production against the marginal benefits received.
C) When sunk costs are added to variable costs, they will equal the total costs of production.
D) They are costs that are relevant to future decisions and should be carefully considered.

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. They are irrelevant to future decisions because they cannot be changed or avoided.

Which of the Following Best Describes Sunk Costs