How do sunk costs affect a firm's decision-making process in the short run?

Economics Short Run Vs Long Run Costs Questions

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How do sunk costs affect a firm's decision-making process in the short run?

Sunk costs do not affect a firm's decision-making process in the short run. In the short run, a firm's decisions are based on variable costs and revenues, as sunk costs are already incurred and cannot be recovered. Therefore, they are irrelevant to the decision-making process in the short run.