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if gavina gourmet coffee’s don francisco brand had a poor market introduction and lost significant money and the company then decided to put substantially more money into this brand, this would be an example of the . a framing bias b anchoring effect c sunk costs error d randomness bias e overconfidence bias

Respuesta :

Option (c) sunk costs error is the correct answer.

The given situation would be an example of sunk costs error.

Sunk expense error: What is it?

  • Spending that has already been made but cannot be recouped is known as sunk costs.
  • Sunk expenditures are frequently ignored in businesses because they are seen to be unrelated to current and upcoming financial difficulties.
  • On the other hand, relevant expenses are ones that will occur in the future but have not yet.
  • A psychological impediment known as the sunk cost fallacy prevents people from finishing failed projects just because they invested money in them.
  • Sunk costs are important since they could act as deterrents when making decisions. When a corporation compares costs and advantages, sunk expenses shouldn't be taken into account because they will still be incurred regardless of the choice.

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