Which of the Following Is True Regarding the MSE and MAD

question 116

Multiple Choice

Which of the following is true regarding the MSE and MAD in forecasting?

• A) The MAD will tend to be a larger value than the MSE.
• B) The MSE is much more useful than the MAD.
• C) The square root of the MSE provides a value that will be similar to the MAD.
• D) The MAD will be equal to the MSE.

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Definitions:

Variable Costs

are expenses that vary directly with the level of production or output.

AVC

Average Variable Cost refers to the total variable costs per unit of output in economics, helping businesses analyze production expenses.

ATC

Average Total Cost, which is the total cost per unit of output produced, calculated by adding all production costs and dividing by the number of units produced.

Marginal Output

The increase in output resulting from a one-unit increase in the level of input, while holding other inputs constant.