Can t sunk costs be counted as marginal costs?

On the other hand, if you are very committed to something, you can not only reap the best results, but also minimize sunk costs.

The difference between sunk cost and opportunity cost is:

1.Sunk cost and opportunity cost have different meanings.

2.Sunk costs are explicit and visible on the outside: while opportunity costs are implicit and not easily recognizable.

Opportunity cost

1.It refers to the maximum value of giving up something in order to get something; It can also be understood that when faced with a multi-option decision, the most valuable option to be discarded is the opportunity cost of the decision; It also refers to the highest profit that manufacturers can obtain by investing the same factors of production in other industries.

2.Opportunity cost, for a commercial company, can be when a certain amount of time or resources are used to produce a commodity, and the lost opportunity to use these resources to produce other best substitutes is opportunity cost. In life, there are some opportunity costs that can be measured in monetary terms.

3.But there are some opportunity costs that are often not measurable in monetary terms, such as choosing between reading a book in the library or enjoying a TV series. Opportunity cost refers to one of the biggest losses after making a choice, and the opportunity cost will change with the cost paid, for example, when the preference or value of the discarded option changes, and the value obtained will not change the opportunity cost.

3.And if you discard the option to choose the highest value (preferred) in the selection, then its opportunity cost will be preferred. When making a choice, you should choose the option with the highest value (the option with the lowest opportunity cost), and abandon the option with the highest opportunity cost, that is, the less you lose, the wiser.

Extended Material: Sunk Costs

1.Refers to the cost that cannot be changed by any decision in the present or in the future because a decision has already occurred in the past.

2.When people decide whether to do something, they not only look at whether it is good for them, but also look at whether they have invested in it in the past. We refer to these irretrievable expenses that have already been incurred, such as time, money, energy, etc., as "sunk costs".

The term "sunk cost" is used in economics and business decision-making, referring to costs that have already been paid and cannot be recovered.

3.Sunk costs are often compared to variable costs, which can be changed, while sunk costs cannot be changed.

Sunk costs. It refers to the irretrievable cost caused by past decisions, which belongs to the historical cost, and no decision in the present and future can be reversedSunk costSunk cost including time, money and energy, etc. Sunk costs in economic activity.

It is relatively easy to be perceived by investors, and many people will stick to an investment because of the cost they have already paid, ignoring whether the investment itself is beneficial to themselves.

Extended information: Investment refers to the process by which a country, an enterprise or an individual signs an agreement with each other for a specific purpose to promote social development, achieve mutual benefit and transfer funds. It is also an economic behavior in which a specific economic entity invests a sufficient amount of funds or monetary equivalents in kind into a certain field in a certain period of time in order to obtain income or capital appreciation in the foreseeable period in the future.

It can be divided into physical investment, capital investment and ** investment.

Sunk costs are expenses that have been incurred in the past but are not related to the current decision. From the perspective of decision-making, the expenses incurred in the past are only a certain factor that causes the current state of Qiyanji, and the current decision-making should consider the possible future expenses and the benefits brought by them, rather than the costs incurred in the past.

For an enterprise, sunk cost is the expenditure that has been paid in cash in previous business activities and amortized in the operating period. Hence the fixed assets.

Intangible assets, deferred assets.

and so on, all of which are sunk costs of the enterprise.

In terms of cost traceability, sunk costs can be direct or indirect costs. If sunk costs can be traced back to individual products or sectors, they are direct costs; If it is caused by several products or departments, it is an indirect cost.

In terms of the form of cost, sunk cost can be a fixed cost.

It could also be variable costs.

When a company dismantles a department or stops the production of a product, the sunk cost usually includes both fixed costs such as machinery and equipment, as well as variable costs such as raw materials and parts. Typically, fixed costs are more likely to sink than variable costs.

From a quantitative point of view, sunk costs can be overall or partial. For example, if the machinery and equipment that are discarded in the middle of the process can be sold to obtain part of the value, then its book value.

It will not sink completely, only the part of the realizable value that is lower than the book value is the sunk cost.

Generally speaking, the more liquidity, versatility, and compatibility an asset is, the less it sinks. The notion that "cash is king" can also be understood from this perspective. Fixed assets, research and development, and specialized assets are all easy to sink, and the division of labor and specialization often correspond to certain sunk costs.

First, the content is different.

Sunk Spring Costs: Expenses incurred in the past but not related to current decision-making.

Fixed costs: Refers to the costs that can remain unchanged in a certain period of time and within the scope of business volume, which are not affected by the increase or decrease of business volume.

Second, the field of application is different.

Sunk costs: The areas of application for sunk costs include finance, economics, and business.

Fixed costs: Fixed costs are applicable in areas such as construction projects and road and bridge works.

Third, the disciplines should be different.

Sunk costs: The applied disciplines of sunk costs are accounting and finance.

Fixed Costs: The applied disciplines of fixed costs are economics and engineering economics.

Fourth, the scope of change is different.

Sunk cost: Sunk cost cannot be changed.

Fixed costs: If the volume of business changes beyond a certain range, the fixed costs will change.

Encyclopedia - Fixed costs.

When you watch a movie and the first 20 minutes are not good, will you choose to continue watching it, or will you turn away?

I guess most people will finish reading it even if they sleep, because they bought a ticket, and it took 20 minutes, and the sunk cost has been paid, and it feels a pity to turn around and leave.

Let's look at the answer from an economic perspective, and the answer is: you should turn away.

Sunk costs are not costs from an economic point of view.

Cost is the biggest price to give up, and the time and ticket money that has been paid is the sunk cost and hail is not the cost.

Take the time source as an example, take yourself as the coordinates, your past time is the sunk cost, and the time you are about to give up for something in the future is called the cost.

Think about it, are there any theories that can be refuted?