The Loss in Sales of an Existing Product Is a Sink

question 53

Multiple Choice

The loss in sales of an existing product is a sink cost when assessing the cost of a new product if:

• A)A competitor's product would have reduced the sales of the existing product.
• B)The existing product is more costly to produce than the new product.
• C)The existing product is less costly to produce than the new product
• D)The loss in any sales should never be considered a sunk cost.
• E)A competitor's product is not expected to create a loss in sales of the existing product.

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Definitions:

Egoism

Giving to another person to ensure reciprocity; to gain self-esteem; to present oneself as powerful, competent, or caring; or to avoid social and self-censure for failing to live up to society’s expectations.

Altruism

A selfless concern for the well-being of others without expectation of reward or recognition.

Personal Gain

Pursuing actions or decisions primarily for self-benefit or personal advantage.

Cognitive Dissonance Theory

A concept in social psychology that describes the discomfort felt by an individual who holds contradictory beliefs, ideas, or values.