A Cost Is Sunk If It

question 102

Multiple Choice

A cost is sunk if it

• A)is not an incremental cost.
• B)is unavoidable.
• C)has already been incurred.
• D)is irrelevant to the decision at hanD.

---

Definitions:

Profits

The financial gain realized when the revenue from selling goods or services exceeds the costs of production.

Monopolized

Refers to a market structure where a single firm or entity controls a significant portion of the market share, reducing competition.

Consumer Surplus

Consumer Surplus is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Net Social Gain

The overall benefit to society, calculated by subtracting total social costs from total social benefits.