Market Testing Can Be Risky Because It Gives Information to Competitors

question 109

True/False

Market testing can be risky because it gives information to competitors, but not testing may be even riskier.

---

Definitions:

Marginal Cost

The added expense incurred upon producing one further unit of a good or service.

Average Cost

The total cost of production divided by the quantity of output produced, indicating the cost per unit of output.

Short-run Cost Function

A relationship between production cost and output level when one or more inputs are fixed, typically analyzing costs within a time frame that doesn't allow for all factors of production to be adjusted.

Long-run Cost Function

A representation of the total cost associated with the production of goods over time, taking into account all variable and fixed inputs.