Firms That Face Capacity Constraints Can Only Increase Output Only

question 3

Multiple Choice

Firms that face capacity constraints can only increase output only up to the capacity,but no further.Therefore,firms

• A)Should price to capacity as long as MR > MC
• B)Should price to capacity as long as MR = MC
• C)Should price to capacity as long as MR < MC
• D)Should not take capacity into consideration in pricing decisions

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Definitions:

Null Hypothesis

A theory positing no substantial variance between designated groups, attributing any noted disparity to errors in sampling or experimentation.

Normal Distribution

A probability distribution, symmetric around the mean, shows that datasets close to the mean are encountered more often than ones farther away.

Goodness-of-fit Test

A goodness-of-fit test is a statistical test used to determine how well a set of observed values fits a specific distribution or model.

Normally Distributed

Characterized by its symmetry around the mean, this probability distribution highlights a more frequent occurrence of data near the mean compared to far from the mean.