Question: A software company is developing two products (A and B). The total cost to develop each product is $1 million, and the two products are

A software company is developing two products (A and B). The total cost to develop each product is $1 million, and the two products are expected to generate the same amount of profits. Suppose that the company has already spent 50% of the total cost on product A and has spent only 10% of the total cost on product B. Suppose also that due to unexpected budgetary constraints, the company has to cancel one of the projects.

Which product would most people (who do not understand sunk cost fallacy) cancel?

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