A Sunk Cost _____

question 133

Multiple Choice

A sunk cost _____

• A) can only be measured in monetary terms.
• B) is a cost that has already been incurred and cannot be recovered.
• C) should influence a person's choice if that person is a marginal decision maker.
• D) lowers the efficiency of production.
• E) should not be considered when making economic decisions.

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Definitions:

Shutdown

A short-term decision by a company to cease operations due to unfavorable market conditions, aiming to minimize losses.

Short-Run Supply Curve

A graph that shows the relationship between the price of a good and the quantity of that good supplied by producers over a short period, where some inputs are fixed.

Long-Run Supply Curve

A graphical representation showing how the quantity supplied of a good or service varies with price over a long period, when all inputs can be varied.

Marginal Cost

The supplementary cost associated with making an additional unit of a product or service.