In the end, the campaign proved unsuccessful. The sunk cost for the company equates to the $5,000 that was spent on the market and advertising means. This expense is to be ignored by the company in its future decisions and highlights that no additional investment should be made. Despite the fact that sunk costs should be ignored when making future decisions, people sometimes make the mistake of thinking sunk cost matters. This is sunk cost fallacy. Example：Steven bought a game for $100, but when he started to play it, he found it was boring rather than interesting. But Steven thinks he paid $100 for the game, so he has to play it through. Sunk cost: $100 and the cost of the time spent playing the game. Analysis: Steven spent $100 hoping to complete the whole game experience, and the game is an entertainment activity, but there is no pleasure during the game, which is already low efficiency, but Steven also chose to waste time. So it is adding more cost. Marginal cost The concept of marginal cost in economics is the incremental cost of each new product produced for the entire product line. For example, if you build a plane, it costs a lot of money, but when you build the 100th plane, the cost will be much lower. When building a new aircraft, the materials used may be more useful, so make as many aircraft as possible from as few materials as possible to increase the margin of profit. Marginal cost is abbreviated MC or MPC. Marginal cost: The increase in cost caused by an additional unit of production is called marginal cost. By definition, marginal cost is equal to change in total cost (TC) (△TC) divided by the corresponding change in output (△Q) : Change in total cost/change in output: MC(Q)=△TC(Q)/△Q or MC(Q)=lim=△TC(Q)/△Q=dTC/dQ(△Q→0) (as shown in Figure 1) In theory marginal costs represent the increase in total costs (which include both constant and variable costs) as output increases by 1 unit. Use of opportunity cost Economic profit versus accounting profit The main objective of accounting profits is to give an account of a company’s fiscal performance, typically reported on in quarters and annually. As such, accounting principles focus on tangible and measurable factors associated with operating a business such as wages and rent, and thus, do not “…infer anything about relative economic profitability.” Opportunity costs are not considered