When fixed costs are ignored because they are irrelevant to a business's production decision, they are called

A) explicit costs.
B) implicit costs.
C) sunk costs.
D) opportunity costs.

Question

When fixed costs are ignored because they are irrelevant to a business's production decision, they are calledA) explicit costs.B) implicit costs.C) sunk costs.D) opportunity costs.

Ambar Guerrero · Accepted Answer

Final Answer : C, Explanation :  Sunk costs are costs that have already been incurred and cannot be recovered, and thus are irrelevant to future business decisions, including production decisions. Fixed costs that are ignored because they are irrelevant to a decision are considered sunk costs.

When fixed costs are ignored because they are irrelevant to a business's production decision, they are called

A) explicit costs.
B) implicit costs.
C) sunk costs.
D) opportunity costs.

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