50 years ago Ford Motor Company spent $1 Billion building a manufacturing plant in Ohio. The company is currently considering spending $100 million upgrading the plant to manufacture electric cars. The company consider the $1 billion dollars spent to build the plant when deciding if it should upgrade it because the $1 billion is a cost. O should; sunk O should not; sunk O should; fixed O should not; fixed

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 11RQ: What is die difference between accounting and economic profit?
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50 years ago Ford Motor Company spent $1 Billion building a manufacturing
plant in Ohio. The company is currently considering spending $100 million
upgrading the plant to manufacture electric cars. The company
consider the $1 billion dollars spent to build the plant when deciding if it
should upgrade it because the $1 billion is a cost.
O should; sunk
O should not; sunk
O should; fixed
O should not; fixed
Transcribed Image Text:50 years ago Ford Motor Company spent $1 Billion building a manufacturing plant in Ohio. The company is currently considering spending $100 million upgrading the plant to manufacture electric cars. The company consider the $1 billion dollars spent to build the plant when deciding if it should upgrade it because the $1 billion is a cost. O should; sunk O should not; sunk O should; fixed O should not; fixed
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