When Forecasting Total Demand for All Their Services or Products

question 75

Multiple Choice

When forecasting total demand for all their services or products, few companies err by more than:

• A) one to four percent.
• B) five to eight percent.
• C) nine to twelve percent.
• D) thirteen to sixteen percent.

---

Definitions:

Implicit Costs

The opportunity costs that are not directly paid for in cash but represent the loss of alternative benefits when resources are used for a particular purpose.

Explicit Costs

Direct, out-of-pocket payments for goods and services that are used in the production of other goods or services.

Accounting Profit

The financial profit of a business calculated by subtracting total expenses from total revenue, as shown in the company's income statement.

Economic Profit

A measure of profitability calculated by subtracting both explicit and implicit costs from total revenues, reflecting the true economic performance of a business.