One of the Advantages of Simulation Is That

question 50

Multiple Choice

One of the advantages of simulation is that

• A) it is much less expensive than a mathematical solution
• B) it always generates a more accurate solution than a mathematical solution
• C) it can study the interactive effects of individual components or variables
• D) model development is less time consuming than for mathematical models
• E) model solutions are transferable to a wide variety of problems

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Definitions:

Industry Entry

The process by which a new competitor or business enters into an industry, facing various barriers such as high startup costs, regulatory requirements, and competition.

Short Run

A period of time during which at least one of a firm's inputs is fixed and cannot be changed.

Normal Return

The minimum profit necessary to keep a company in business, equating to the opportunity cost of capital.

Own Capital

The funds or assets personally invested by the owners into a business, distinct from borrowed capital.