Search results
Results from the Think 24/7 Content Network
Sunk cost. In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. [1] [2] Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. [3] In other words, a sunk cost is a sum paid in the past ...
Analyzing from the composition of costs, sunk costs can be either fixed costs or variable costs. When a company abandons a certain component or stops processing a certain product, the sunk cost usually includes fixed costs such as rent for equipment and wages, but it also includes variable costs due to changes in time or materials. Usually ...
The most common types of costs that are factored into this decision include: [89] Fixed costs; Variable costs; Marginal cost; Average total cost; Sunk costs; The impact of short-run and long run costs are important in determining production in a certain firm . It is assumed some costs are fixed in the short-run and are thus considered "fixed ...
Alamy There are some economic terms most of us know and understand, such as supply and demand. And there are other terms we will probably never even run across, like implicit logrolling and a ...
To mitigate cognitive biases, such as the sunk-cost bias, educators must raise students' awareness of these common judgment errors. In this article, the author proposes a classroom activity that actively engages students and allows them to identify this bias in their own judgments.
The sunk-cost problem helps explain why it was so hard to end that war. It is worth considering this problem as we reflect on current wars. The sunk-cost fallacy applies in our thinking about the ...
For premium support please call: 800-290-4726 more ways to reach us
Fixed and Sunk Costs Revisited. Wang, X. Henry; Yang, Bill Z. Journal of Economic Education, v32 n2 p178-85 Spr 2001. Attempts to clarify the concepts of, and the link between, fixed costs and sunk costs. Argues that the root of confusion is the inconsistency in defining the term fixed costs. Consistently defines fixed and sunk costs, and ...