Sunk costs are:
a) costs that save time
b) costs that save money
c) costs that are a done deal
d) the cost of the Titanic
In decision-making processes, rational agents face two types of costs namely retrospective costs or sunk costs and prospective costs, the latter of which are costs that will be influenced if the action is taken. Prospective costs can lead to unintended losses or profits for the decision-makers.
Answer and Explanation:
Ans. c) costs that are a done deal
In the process of production, sunk costs refer to the costs that have already been incurred and cannot be recovered anymore. Sunk costs include all payments made by the producer that are no longer relevant to decisions regarding the future course of action. Sunk costs are also known as retrospective costs.
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from WEST Business & Marketing Education (038): Practice & Study GuideChapter 31 / Lesson 8