Definition
- Sunk cost
- A sunk cost is a cost incurred in the past that cannot now be recovered.
- Not to be confused with: Opportunity cost
- Opportunity cost is what a person must give up in order to obtain what they want.
Test yourself
What is the difference between sunk cost and opportunity cost?
Opportunity cost is what a choice still to be made gives up; a sunk cost is already gone whatever you choose.