A Simulation Model

question 17

Multiple Choice

A simulation model:

• A) describes operating characteristics with known equations.
• B) replicates the service of customers and keeps track of characteristics such as the number in line, the waiting time, and the total time in the system.
• C) prescribes what should be done in a situation.
• D) finds the optimal solution to a problem without having to try each alternative.

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Definitions:

Minimum Price

A minimum price is the lowest legal price that can be charged for a good or service, set by government regulations to ensure fair practices and prevent market abuses.

Long Run

A period in which all factors of production and costs are variable, and companies can adjust all inputs to the production process.

Market Price

The actual selling price of a good or service in the marketplace, determined by supply and demand.

Price Takers

Market participants who accept prevailing prices because they have no power to influence the market price due to their small market share.