After purchasing a reusable water bottle from your local convenience store for $10.00, you can always refill your bottle at the store’s water station for $1.00. What is the sunk cost in this scenario?

Question

BlackTom AI · Accepted Answer

Let's examine what counts as a sunk cost in this scenario. The $10.00 paid for the reusable bottle is money that is already spent and cannot be recovered by any future action, so it qualifies as a sunk cost.
Option $1.00: This is the price you would pay in the future to refill the bottle at the store. It represents a future cost, not a past cost that cannot be recovered, so it is not sunk.
Option $11.00: This is the sum of the initial purchase ($10.00) and a refill ($1.00). While this total equals money spent, sunk cost refers only to money already spent that cannot be recovered, not the total that would be spent going forward. Therefore, this figure does not correctly define sunk cost.
Option $0.50: This amount has no relation to the described costs in the scenario. It does not represent either the initial purchase cost or a typical future refill cost, so it is misleading as a sunk-cost figure.
Option $10.00: Reiterating the key point, the $10.00 already spent on the bottle is irrecoverable and meets the definition of a sunk cost. It should not influence future decision-making about refilling or buying anew, since it cannot be recovered.

After purchasing a reusable water bottle from your local convenience store for $10.00, you can always refill your bottle at the store’s water station for $1.00. What is the sunk cost in this scenario?

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What is a sunk cost?

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Retrospective (past) costs that have already been incurred and cannot be recovered.

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