Under What Conditions Will a Competitive Firm Continue to Grow

question 46

Multiple Choice

Under what conditions will a competitive firm continue to grow in size?

• A)Until diminishing returns set in.
• B)Until it is just able to cover its variable costs.
• C)As long as other firms do.
• D)Until it achieves minimum efficient scale.
• E)Until it makes an economic profit.

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Definitions:

Error Variable

The error variable represents the component of randomness or unexplained variance in a statistical model, distinguishing between the observed and predicted values.

Probability Distribution

A mathematical procedure that assesses the likelihood of different experiment outcomes.

Random Error Term

Refers to the unpredictable and inevitable fluctuations or deviations in data or experimental results that cannot be attributed to the variables being studied.

Variance

A statistical measure that represents the average squared deviation from the mean, showing how data points are spread out.