Assume that a cargo ship carrying the merchandise of a cloth merchant has been wrecked.Such a setback will be accounted as the merchant's:
A)sunk cost.
B)deadweight loss.
C)marginal cost.
D)opportunity cost.

Question

Quizplus · Accepted Answer

Sunk cost refers to money that has already been spent and cannot be recovered. In this case, the loss of merchandise due to the shipwreck represents a cost that the merchant cannot recover, making it a sunk cost.

Assume That a Cargo Ship Carrying the Merchandise of a Cloth