why-are-sunk-costs-irrelevant-to-the-short-run-shutdown-decision

Question

Why are sunk costs irrelevant to the short run shutdown decision?

Accepted Answer

Sunk costs cannot be recovered and do not affect future decisions.

Answer

Sunk costs are only relevant in the long run.

Answer

Sunk costs are fixed costs that can be avoided by shutting down.

Answer

Sunk costs are variable costs that change with production levels.