It Was Believed That the Probability of a Small Business

question 19

Multiple Choice

It was believed that the probability of a small business that declared bankruptcy per month was
The same in any month.Also the number of small businesses that declared bankruptcy was the
Same every month.Which of the following distributions would you use to determine the
Probability that more than 3 bankruptcies will occur next month?

• A) Hypergeometric distribution.
• B) Poisson distribution.
• C) Uniform distribution.
• D) Binomial distribution.

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Definitions:

Shutdown

The short-term decision by a firm to cease production due to operating at a loss, where total revenue is not covering variable costs.

Implicit Costs

These refers to the opportunity costs that are not directly paid or incurred but represent the foregone benefits from using resources in a particular way.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the financial success exceeding the opportunity cost of resources.

Accounting Profit

The net income for a company calculated by subtracting total expenses from total revenues according to accounting principles, not including implicit costs.