Kiran paid Global TV $2,000 to run commercials for her business. Even though the commercials are over, her customers still mention them. While the commercials continue to generate new business, the $2,000 is a sunk cost.

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been incurred and cannot be recovered regardless of future events. In this case, the $2,000 paid for the commercials is a sunk cost because it cannot be recovered, even though the commercials continue to generate new business.

Kiran Paid Global TV $2,000 to Run Commercials for Her