An Economic Model Will Produce Poor Predictions If It Includes

question 49

True/False

An economic model will produce poor predictions if it includes unrealistic assumptions.

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Definitions:

Marginal Revenue

The additional income received from selling one more unit of a good or service; it is an important concept in determining optimal output levels.

Break-Even Point

The point at which total costs and total revenue are equal, resulting in no net loss or gain.

Output

The total amount of goods and services produced by an economy, company, or industry within a specific period.

Long-Run Supply Curve

A graphical representation showing the relationship between price and the quantity supplied that firms are willing to produce, given all inputs are variable.