Rational Choice and Sunk Cost
A student paid $200 for a non-refundable economics textbook. The student is later offered $150 for the book, which they value keeping for future reference at $120. What is the rational economic decision for the student?
A
Keep the book since $200 > $150
B
Sell the book since $150 > $120
C
Keep the book to avoid a $50 loss on the purchase price
D
Indifferent between keeping and selling
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