Sunk Cost because is a cost that has already been incurred and cannot be recovered. Since decision-making only affects the future course of business, sunk costs should be irrelevant in the decision-making process. Instead, a decision maker should base her strategy on how to proceed with business or investment activities on future costs.
A clinic's cost and visit data are as follows. Calculate its average and marginal costs. Note that you can only calculate marginal cost as visits increase from 100 to 110.
Visits | Total Cost | Average Cost | Marginal Cost
100 $2,000
110 $2,100
