Which of the following costs are always relevant for decision making?

Question

Quizplus · Accepted Answer

Opportunity costs and differential costs are the costs that are always relevant for decision making. Opportunity cost refers to the potential benefits that are forgone by choosing one option over the others, while differential costs are the costs that differ between the alternatives being considered. Sunk costs, on the other hand, are not relevant for decision making since they are already incurred and cannot be recovered. Fixed costs may or may not be relevant depending on the nature of the decision being made.

Which of the Following Costs Are Always Relevant for Decision