A High Adjusted R-Square for the Regression of a Cost

question 110

Multiple Choice

A high adjusted R-square for the regression of a cost against a cost driver indicates:

• A) The predicted linear relationship between the cost and the cost driver is probably correct
• B) The relationship between the cost and the cost driver is probably linear
• C) The cost driver explains a high percentage of the variation of the cost
• D) The cost driver is statistically significant

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Definitions:

Dominant Firms

Companies that have a major share of sales in a particular market, giving them significant power over the market price.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, allowing for competition based on quality, price, and marketing.

Large Number

In economics, it often refers to a market condition where there are many buyers and sellers, leading to competitive prices.

Monopolistic Competitor

A monopolistic competitor operates in a market structure characterized by many firms offering products that are similar but not identical, leading to differentiated competition.