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That's a misunderstanding of what a sunk cost is. Which of the following are sunk costs? A car has a resale value. That resale value decreases with each additi
by elgenie 9y ago
That's a misunderstanding of what a sunk cost is. Which of the following are sunk costs?
A car has a resale value. That resale value decreases with each additional mile on the odometer. That's the depreciation incremental cost.
A car requires insurance. Insurance rates fluctuate based on miles driven per period (and also based on whether the car is used in ride-sharing).
A car requires maintenance and repairs are incurred on a per mile basis. For example, when a $30 oil change is needed every 3K miles with 300 miles of trips to the grocery store and 2700 miles of Ubering, it'd be asinine to assign that cost in a way other than $27 of that going to Ubering.
A car requires fuel. The same logic as the oil change; $30 for gas to drive 30 miles to the grocery store and 270 for Uber can be uniformly distributed per-mile.