A manager invests $400,00 . in a technology to reduce overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85 . After a year, the manager has an opportunity to outsource production to another company at a cost per unity of $1.75 . If you are the manager, you

a. should consider the $400,00 . as sunk cost and therefore it should not be relevant to the decision.
b. should base your decision upon economic profit and not accounting profit
c. should avoid the fixed-cost fallacy
d. all the above


d

Economics

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