You pay $15 for a movie ticket. Halfway through the movie, you believe that the movie is awful and will only get worse in the second half of the film. In order to get your money's worth, you decide to stay for the remainder of the movie. a. True or b. False: This is not an example of the fixed-cost fallacy.

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Business

Dawson Morrow

13 January, 06:55

You pay $15 for a movie ticket. Halfway through the movie, you believe that the movie is awful and will only get worse in the second half of the film. In order to get your money's worth, you decide to stay for the remainder of the movie. a. True or b. False: This is not an example of the fixed-cost fallacy.

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Nevaeh Villa · Answer 1

(b) False

Explanation:

Fixed-cost fallacy or Sunk-cost fallacy

considers irrelevant costs considers overhead and depreciation costs to make short-run decisions

The price of the movie ticket is a fixed-cost fallacy or sunk-cost fallacy

It does not change with the decision to stay for the remainder of the movie To consider irrelevant costs into consideration when making decisions is an example of fixed-cost fallacy