Several decades ago, the British and French governments agreed to jointly produce the Concorde, a supersonic plane. After British taxpayers had spent 300 million (over $2 billion in terms of money today) to help develop the plane, the British government concluded that because this vast sum of money had been spent, any decision to cancel the plane was nonsensical and, consequently, the only reasonable decision was to finish the project. Does this reasoning make economic sense? Why or why not? (Incidentally, the plane was finished and flew for 27 years before it was retired in 2003.)

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The reasoning behind the decision to continue the Concorde project despite the significant investme... View the full answer