Sunk costs refer to:
A) costs that were incurred in the past and cannot be recovered, and thus should not affect current decisions
B) all the costs that a firm must incur in the process of production
C) comparing the benefits and costs of choosing a little more or a little less of a good
D) whatever must be given up to obtain something that is desired

Question

Quizplus · Accepted Answer

Sunk costs are the costs that have already been incurred and cannot be recovered, and thus should not be factored in when making current decisions. These costs are irrelevant to decision making because they cannot be changed or avoided.

Sunk Costs Refer To