If the Span of a Moving Average Is Large -

question 4

True/False

If the span of a moving average is large - say,12 months - then few observations go into each average,and extreme values have relatively large effect on the forecasts.

---

Definitions:

Marginal Cost

The financial impact of manufacturing an additional unit of a product or service.

Profit Maximization

A company's objective to make the most amount of profit possible with its current resources and market conditions.

Competitive Firm

A company that operates in a market with many buyers and sellers, where each has a negligible effect on the market price.

Average Total Cost

The cost per unit of output, calculated by dividing the total production cost by the quantity of output produced.