If a Firm Has to Increase Output Suddenly to Meet

question 52

True/False

If a firm has to increase output suddenly to meet an increase in demand,its average total cost will decrease in the short run until it has time to add physical capital.

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Definitions:

Annuity

A series of equal cash receipts spaced equally in time; a series of equal net cash flows at fixed time intervals.

Sensitivity Analysis

A form of analysis that considers the impact of changing one or more inputs or assumptions on the resulting outcome.

Likelihoods

The probabilities or chances of different outcomes occurring.

Probabilities

A statistical measure that quantifies the likelihood of one or more events happening.