A student once said she 'didn't believe in sunk costs. She meant that the idea that 'some costs are sunk and shouldn't be accounted for in making decisions' didn't make sense and that all costs associated with a project were important. Do you think the concept of sunk costs is important to business decision-making? Why or why not?

Q: When economist Jacob Viner first developed the envelope relationship, he told his draftsman to make…

A: The Long Run Average Cost (LAC) is calculated by dividing long run total costs by the amount of…

Q: Why is the Average Total Cost curve U-shaped?

A: The average cost (AC) or average total cost (ATC) is the cost per unit of production. The average…

Q: The basic difference between the short run and the long run is that?

A: Short run refers to the time period which does not allow the change in capital to adjust with market…

Q: Another important law in economics is the “law of marginal returns or the law of increasing costs".…

A: Marginal return refers to the additional output that obtained by increasing one more unit of input.

Q: What is the Difference between Fixed Costs, Variable Costs, and Marginal Costs?

A: Fixed cost: Fixed costs are those costs that remain fixed for every unit of output produced. It does…

Q: Why can the distinction between fixed costs and variable costs be made in the short run?

A: Understanding the difference between fixed costs and variable costs is important for settling on…

Q: Your aunt is thinking about opening a hardware store.She estimates that it would cost $500,000 per…

A: opportunity cost is what is sacrificed when a person select one option over another one. it is a…

Q: How would the long run total cost curve change if the price of capital increase? Explain your answer…

A: Long run total cost curve show the total cost of optimal choice of combination for labor and capital…

Q: Briefly describe the flow of costs in a manufacturing company?

A: Cost flow refers to how or the direction by which costs pass through a organization. Usually, the…

Q: What are Fixed Costs?

A: A company mainly faces two type of costs known as fixed cost and variable cost. These two costs are…

Q: What does average fixed cost fall with increase in output?

A: Fixed cost per unit of output is known as average fixed cost. Because the same amount of fixed costs…

Q: Why does the average fixed cost falls with the increase in output?

A: Fixed cost is that cost which doesn't Change in the short run as the production proceeds.  Average…

Q: Discuss the impact of long run on cost of doing business.

A: Meaning of Cost: The term cost refers to the situation under which a firm occurs various expenses…

Q: What is the difference between implicit and explicit costs? Why do economists include both implicit…

A: Each firm in any industry is driven by profit motive. The goal of a firm is to maximize its sales…

Q: Explain the term Total costs?

A: Any firm main objective is to maximize its profit and for maximizing profits every firm must know…

Q: What are Fixed and Variable Costs?

A: Fixed cost: Fixed cost refers to those costs which remain the same throughout the production.…

Q: . If economic profit equals accounting profit, what do implicitcosts equal?

A: Basics:- Economic Profit     = Revenue - Explicit Cost - Implicit Cost Accounting Profit  = Revenue…

Q: If so, can you provide an example of what you mean by the operational environment?

A: The term operational enviornment is used to explain different situations in different fields as it…

Q: Fixed costs can be defined as costs that

A: A fixed cost(FC) is the cost that does not change with the decrease or increase in the number of…

Q: Help me answer this review question. Fill in the Blanks.  If the marginal cost equals average cost,…

A: In a market, cost curves provide significant information about the productivity and efficiency of…

Q: What is another term for marginal costs

A: Marginal cost refers to the additional cost incurred by firm or a producer when one additional unit…

Q: Marginal cost curve always cuts the lowest point of the average total cost curve. Do you agree?…

A: Marginal Cost:Marginal cost refers to the additional cost of producing the additional unit of…

Q: What are the different type of costs incurred in the short run and in the long run?

A: In the short run there are two types of costs, fixed and variable costs. Since there are fixed and…

Q: Microeconomics divides costs in to “short-run costs” and “long-run costs”. Can “long-run” differ…

A: The short run is defined as the time frame during which wages and prices of other production inputs…

Q: Distinguish between explicit and implicit costs, giving examples of each. What are some explicit and…

A: Cost is the expenditure incurred by firms on the production of goods and services.

Q: fall in the long-run cost curve

A: A cost curve which represents the minimum cost at which output can be produced in the long run is…

Q: Why should sunk costs be ignored for decision making? Give an example of why it makes sense to…

A: Sunk cost are those cost which have been caused and the sum spent can not be recovered.since the…

Q: If people thought in a rational way before spending money on anything, would they truly avoid sunk…

A: Rational behavior refers to the situation where people making their decision sensibly. In other…

Q: Explain how a company could choose to get bigger, yet lower their average costs?

A: Average cost: It is average cost incurred for producing a good.

Q: What is a cross-functional business process? Give one example of a cross-functional business…

A: Meaning of Cross-Functional Business Process: The term cross-functional business process refers to…

Q: How do you find total fixed cost?

A: Total cost of production includes all the fixed cost of production and the variable cost of…

Q: if economic profit equals accounting profit, what do implicit cost equal?

A: (Q) If economic profit equals accounting profit, what do implicit cost equal? There are two types of…

Q: Would you consider an interest payment on a loan to a firm an explicit or implicit cost?

A: A producer faces two types of the cost when computing accounting profit and economic profit. These…

Q: How would you derive marginal cost from total cost?

A: Marginal cost is defined as the cost which is incurred by the producer in order to produce one more…

Q: How does fixed cost affect marginal cost? Why is this relationship important?

A: Fixed cost is the cost which does not change with the change in the output. Marginal cost is the…

Q: Why do most fixed costs become variable costs in the long run?

A: Variable costs- Due to the sum of a product or service being generated, variable costs change. The…

Q: how do you find total fixed cost?

A: Sellers must incur costs while producing goods and services by making a variety of factor payments…

Q: What are different types of costs involved in production of goods and services? Analyze the…

A: Fixed expenses, variable costs, and the total cost of production make up the cost of production. The…

Q: an interest payment on a loan to a firm is an explicit or implicit cost?

A: The implicit cost is an indirect cost defined as the opportunity cost of utilizing a firm's…