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Unformatted text preview: of purchasing more television advertisements are less than the MB of airing more advertisements then sure it would be beneficial. d.“I hate golf, but I paid so much for the clubs that I can’t give it up.” Since the golf clubs were a one time paid deal, it is a sunk cost. Again, you cannot retrieve that money you paid for the golf clubs back. e.“Our expansion project was to cost a total of $3.5 million. To date, we have spent $1.5 million and the project is 50% complete. Newly reported cost overruns have pushed the total cost of the expansion project to $4.5 million so we are abandoning the project.” Since the total cost of the expansion project was 3.5 million and that they have spent 1.5 million already and the project is 50% complete, it is to assume that the project will cost 4.5 million. The marginal costs are 1 million extra then the original cost (4.5-3.5). Therefore, it is wise they are abandoning the project because the MC exceeds MB by a million dollar...
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This note was uploaded on 04/14/2010 for the course ECON 2345 taught by Professor Jamison during the Spring '10 term at York University.
- Spring '10