Prior-Hypothesis Bias Implies That Managers Tend to Seek and Use

question 92

True/False

Prior-hypothesis bias implies that managers tend to seek and use information that is consistent with their prior beliefs.

---

Definitions:

Variable Cost

Expenses that vary in direct proportion to changes in the level of production or sales volume.

Fixed Cost

Costs that remain constant in total amount with changes in the volume of activity, such as rent and salaries.

Mixed Cost

Expenses that have both fixed and variable components, changing with the level of activity but also containing a static element.

Margin Of Safety

The difference between actual or projected sales and the break-even point, indicating the amount of sales that can decline before a business incurs a loss.