What Do Economists Mean by the Phrase "Sunk Costs Are

question 69

Multiple Choice

What do economists mean by the phrase "sunk costs are sunk"?

• A) Sunk costs are irretrievable,but they do lower profits and thus affect the firm's output level.
• B) Sunk costs are a primary reason why marginal costs tend to increase.
• C) Sunk costs cannot be recovered and are irrelevant to future decision making.
• D) Sunk costs lower consumer welfare,because producers "pass on" these costs in the form of higher prices.