Question

firm purchased copper pipes a few years ago at ​$10 per pipe and stored​ them, using them only as the need arises. The firm could sell its remaining pipes in the market at the current price of ​$77. What is the opportunity cost of each pipe and what is the sunk​ cost?

Answer 1

Answer:

The opportunity cost of each pipe and what is the sunk​ cost is $77 and $67 per pipe respectively.

Explanation:

Opportunity cost: The opportunity cost is that cost which is incurred to choose the best options with the available options.

Sunk cost: The sunk cost is that cost which is not recovered in the future. Its other name is the past cost. It does not help to make future decisions as if it is incurred then it cannot be recovered again

So, the opportunity would be the current price i.e $77

And, the sunk cost is $67 per pipe ($77 - $10)