When an Input Represents a Larger Proportion of a Firm's

question 340

Multiple Choice

When an input represents a larger proportion of a firm's total costs, then

• A) demand for the input will tends to be less elastic.
• B) the input demand will not vary significantly with a change in input price.
• C) the usage of the input cannot be varied in the production function.
• D) demand for the input will tends to be more elastic.

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Definitions:

Standard Deviation

An indicator of the extent of variability or spread among a collection of numbers, showing the degree to which these numbers differ from their average.

Significance Level

Significance level, often denoted by alpha, is the probability of rejecting the null hypothesis when it is true, serving as a threshold for determining statistical significance.

Power of a Test

The probability that a statistical test will correctly reject a false null hypothesis; a measure of a test's ability to detect an effect when there is one.

Null Hypothesis

A statement used in statistics that proposes there is no significant difference or effect, and any observed difference is due to sampling or experimental error.