Which Cost Is Not Relevant in Making Financial Decisions

question 43

Multiple Choice

Which cost is not relevant in making financial decisions?

• A) Sunk costs.
• B) Opportunity costs.
• C) Incremental costs.
• D) All three are relevant.

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Definitions:

Cartel Arrangements

Agreements among competing firms to control prices or exclude entry of a new competitor in the market, often resulting in anticompetitive behavior.

Oligopolists

Firms or individuals that control the market for a particular good or service in an oligopoly, where a small number of entities dominate.

Monopoly Power

The ability of a single seller to control market prices and total market output.

Collective Profit

The total profit earned by a group of entities or an industry, considering all its members.