A reduction in the sales of an existing product caused by the introduction of a new product is an example of a(n):
A) sunk cost.
B) opportunity cost.
C) erosion cost.
D) fixed cost.

Question

Quizplus · Accepted Answer

Erosion cost refers to the reduction in sales of an existing product caused by the introduction of a new product. Sunk cost refers to costs that have already been incurred and cannot be recovered. Opportunity cost refers to the cost of the next best alternative foregone. Fixed cost is a cost that remains constant regardless of changes in output or sales.

A Reduction in the Sales of an Existing Product Caused