If a Short-Run Fixed Cost Is Sunk, Then

question 51

Multiple Choice

If a short-run fixed cost is sunk, then

• A)losses can be minimized by shutting down.
• B)the firm should keep producing to cover the sunk cost.
• C)the cost cannot be avoided by shutting down.
• D)Both B and C.

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Definitions:

Company Outcomes

Refers to the results or consequences of a company's strategies and operations, including financial performance, market share, and customer satisfaction.

Strategy

It is a plan of action designed to achieve a long-term or overall goal.

Operating Assets

Assets required for a company to conduct its daily business operations, including property, plant, and equipment, but excluding investments and non-operational assets.

Cost Center

A department or unit within an organization that does not directly contribute to profit but incurs costs for its operation.