Sunk costs are, in a sense, the opposite of marginal costs. A sunk cost is a cost that cannot be altered and that therefore should not enter into your decisions today. It is what it is. Sunk costs are ubiquitous, if only because with the passage of time, everything is past or irrevocably decided and thus becomes a sunk cost.
For example, consider circuit board production—a very competitive industry. If you have just completed a circuit board factory for $1 billion, it is a sunk cost. What matters now is not that you spent $1 billion, but how much the production of each circuit board costs. Having invested $1 billion is irrelevant. What remains relevant is that the presence of the factory makes the marginal cost of production of circuit boards very cheap. It is only this marginal cost that matters when you decide whether to produce circuit boards or not. If the marginal board production cost is $100 each, but you can only sell them for $90 each, then you should not build boards, regardless of how much you spent on the factory. Though tempting, the logic of “we have spent $1 billion, so we may as well put it to use” is just plain wrong. Now, presume that the market price for boards is $180, so you go ahead and manufacture 1 million boards at a cost of $100 each. Alas, your production run has just finished, and the price of boards—contrary to everyone’s best expectations—has dropped from $180 each to $10 each. At this point, the board production cost is sunk, too. Whether the boards cost you $100 to manufacture or $1 to manufacture is irrelevant. The cost of the production run is sunk. If boards now sell at $10 each, assuming you cannot store them, you should sell them for $10 each. Virtually all supply costs eventually become sunk costs, and all that matters when you want to sell a completed product is the demand for the product.
One more note—time itself often, but not always, decides on what is sunk or not. Contracts may allow you to undo things that happened in the past (thereby converting an ex-post sunk cost into a cost about which you still can make decisions), or bind you irrevocably to things that will happen in the future.