Suppose that you join a gym that charges a $250 membership fee.You also have to pay an additional $5 each time you go the gym.In this case,your sunk cost is:
A) $250.
B) dependent upon the number of time you go to the gym.
C) $5.
D) $250 plus $5 times every visit you make to the gym.

Question

Quizplus · Accepted Answer

The sunk cost is the initial upfront cost that is incurred regardless of how many times you visit the gym. In this case, the membership fee of $250 is the sunk cost because it is paid upfront and remains the same no matter how often you go to the gym.

Suppose That You Join a Gym That Charges a $250