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Unformatted text preview: to anyone thinking of investing in her business. economic profit the revenue she receives minus her opportunity cost, which may include implicit as well as explicit costs. Optimal quantity of activity occurs when the graphs of mariginal cost and marginal benefit intersect In this example, the $250 that has already been spent and cannot be recovered is what economists call a sunk cost. Sunk costs should be ignored in making decisions about future actions because they have no influence on their costs and benefits....
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This note was uploaded on 09/20/2007 for the course ECON 1110 taught by Professor Wissink during the Fall '06 term at Cornell University (Engineering School).
- Fall '06