Sensitivity Analysis Is a "What-If" Technique That Managers Use to Examine

question 140

True/False

Sensitivity analysis is a "what-if" technique that managers use to examine how a result will change if the originally predicted data are not achieved or if an underlying assumption changes.

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Definitions:

Output

The total amount of goods or services produced by a company or a production process.

Cost Function

A mathematical relationship that describes how the costs incurred by a firm change with various levels of output.

Profit-Maximizing

A strategy or approach taken by firms to adjust their production and pricing to achieve the highest possible profit.

Output

The amount of products or services generated by a business, sector, or nation during a specific period.