Which of the Following Is True of Maximum Likelihood Methods

question 1

Multiple Choice

Which of the following is true of maximum likelihood methods

• A) They calculate the maximum possible values for parameters
• B) They calculate parameters that give the highest probability of past data occurring
• C) They calculate values for key variables that are most likely to occur in the future
• D) They involve a multivariate regression analysis

---

Definitions:

Economic Profit

The gap between the total income a company makes and all of its expenses, covering both direct and indirect costs.

Optimal Output

The level of production that maximizes a firm's profits, where marginal revenue equals marginal cost.

Economic Profit

The contrast between a corporation's entire earnings and its full expenses, including both tangible and intangible costs.

Average Variable Cost

entails the calculation of the unit cost for variable expenses associated with production, adjusted for changes in output levels, providing insight into economies of scale.