When a firm ignores the opportunity costof capital when making investment orshutdown decisions, this is a case ofa. fixed-cost fallacy.b. sunk-cost fallacy.c. hidden-cost fallacy.d. none of the above.

When a firm ignores the opportunity costof capital when making investment orshutdown decisions, this is a case ofa. fixed-cost fallacy.b. sunk-cost fallacy.c. hidden-cost fallacy.d. none of the above.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 7.5IP

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Question

When a firm ignores the opportunity cost
of capital when making investment or
shutdown decisions, this is a case of
a. fixed-cost fallacy.
b. sunk-cost fallacy.
c. hidden-cost fallacy.
d. none of the above.

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