When a firm decides to change its product line, replace worn-out machinery, buy a new production facility, or acquire a new set of clients, it will…

CA Foundation · Business Economics · PYQS · May 2026
When a firm decides to change its product line, replace worn-out machinery, buy a new production facility, or acquire a new set of clients, it will have to incur______.
(A) A. Sunk costs
(B) B. Incremental costs
(C) C. Opportunity costs
(D) D. Implicit costs

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Incremental costs

Topics: Theory of Production and Cost

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