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Are the costs incurred up to that point considered as sunk

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Reference no: EM131901700

Generally, sunk costs don't affect decisions made by either consumers or firms, although sometimes it might seem that they do. For example, suppose half way through a clinical trial to develop a drug for depression, the firm decides to reconsider the viability of continuing the clinical trial

A. Are the costs incurred up to that point considered as sunk costs?

B. Suppose that the costs of continuing the trial cause the firm to stop the development of the drug. Are the costs of continuing the trial considered sunk costs?

Reference no: EM131901700

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