A "What-If" Technique That Examines How a Result Will Change

question 41

Multiple Choice

A "what-if" technique that examines how a result will change if the original predicted data are NOT achieved or if an underlying assumption changes is called ________.

• A) sensitivity analysis
• B) net present value analysis
• C) internal rate-of-return analysis
• D) adjusted rate-of-return analysis

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production, assuming all other factors remain constant.

Marginal Product

The additional output that is generated by adding one more unit of a specific input, holding all other inputs constant.

Marginal Cost Curve

The curve illustrating the change in total production cost with the addition of one more unit of product, reflecting the principle of increasing costs.

Perfectly Competitive

A market structure where numerous small firms compete against each other selling identical products, and where no single firm can influence the market price.