Exhibit 18

question 41

Multiple Choice

Exhibit 18.2.The following table includes the information about a monthly time series. Refer to Exhibit 18.2.When the exponential smoothing method with α = 0.5 is applied,what is the mean square error (MSE) ?

• A)21.5
• B)25
• C)41
• D)13.67

---

Definitions:

Downsloping

A characteristic of certain economic graphs, such as the demand curve, indicating that as price decreases, quantity demanded increases.

Purely Competitive Firm

A business that operates in a market where there are many buyers and sellers, and it has no control over the market price of its product.

Economic Profit

The difference between a firm’s total revenue and its opportunity costs (including both explicit and implicit).

Long-run Average Total Cost

The total cost per unit of output when all factors of production are variable, and economies of scale have been achieved.