In order for a taxicab to be operated in New York City, it must have a medallion on its hood. Medallions are expensive, but can be resold, and are therefore an example of:

A) a fixed cost.
B) a variable cost.
C) an implicit cost.
D) an opportunity cost.
E) a sunk cost.

Medallion

A distinctive badge or emblem typically made of metal, granted as a mark of honor or authenticity.

Opportunity Cost

The cost of foregone alternatives; the value of the best alternative that is not chosen in order to pursue a certain action.

Implicit Cost

The opportunity cost associated with a firm's use of resources that it owns, which do not have a direct monetary payment but could generate income if deployed elsewhere.