Economics, 3rd Edition

Economists know that sunk costs should not affect pricing decisions.

t
 Sunk costs are those costs that have been spent and cannot be recovered or 

affected by future economic activity. What this means is that the spending on (for 

example) major infrastructure projects will be largely academic. Arguments about 

how much it will cost to build a new high-speed rail link for the eastern half of the 

UK are simply not relevant. What will be important are the on-going costs of actu-

ally running the line and the infrastructure that is built.