Re: Sunk costs and fixed costs

Posted by Amit Goyal on May 15, 2016; 2:33pm
URL: http://discussion-forum.276.s1.nabble.com/Sunk-costs-and-fixed-costs-tp7600819p7600821.html

Let C(q) be the cost function

These are the definitions:

Sunk Cost = C(0)
Fixed Cost = lim_{q --> 0}  C(q)
Variable Cost = C(q) - Fixed Cost


Exercise:
Suppose C(q) = 5 + 2q if q >0; 3 if q = 0

Find Sunk Cost, Fixed Cost and Variable Cost.