What Is a Sunk Cost

question 14

Multiple Choice

What is a sunk cost?

• A)A cost that can be avoided if certain choices are made
• B)A cost that always varies with the output of a factory
• C)The average cost of operating a plant
• D)The "lower envelope" of short-run average cost functions
• E)A cost incurred no matter what the decision is and cannot be avoided

---

Definitions:

Dissolution

The process of formally closing or ending a business, organization, or partnership, typically involving the distribution of its assets.

Insolvent

A financial state where an individual or entity cannot meet their financial obligations as debts become due.

Fully Liable

A term indicating that an individual or entity is completely responsible for the full extent of liabilities or damages in a legal situation.

Charitable Organization

A nonprofit entity that operates to provide relief to the poor, advance education, or undertake other activities serving the public interest.