Robinson pays $100 for tickets to see his favorite sports team play.With 10 minutes left in the game,his team is losing heavily and has no chance of winning the game.Robinson chooses to stay until the end of the game because he wants to get the full value for his admission price.As an economist,you should advise Robinson to

Question

Quizplus · Accepted Answer

The admission price is a sunk cost, which means it cannot be recovered regardless of Robinson's decision to stay or leave. Therefore, Robinson should base his decision on the marginal benefit of staying until the end of the game compared to the marginal cost of doing so. Since his team has no chance of winning and the game is almost over, the marginal benefit of staying is likely to be low. If the marginal cost of staying (e.g. boredom, discomfort) outweighs the marginal benefit, Robinson should leave the game.

Robinson Pays $100 for Tickets to See His Favorite Sports