Suggest a case in which a sunk cost (fixed cost or prepaid costs) would be useful to

Question:

Suggest a case in which a sunk cost (fixed cost or prepaid costs) would be useful to a company. Provide support for your response. Suppose on January 1 a company prepays medical insurance premiums for their employees for the entire year, how would this benefit the company?
Give your opinion on how the model of perfect competition has been useful for economists. Provide support for your response.

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