A Direct Forecast Involves Estimating the Value to Be Forecast

question 23

Multiple Choice

A direct forecast involves estimating the value to be forecast and

• A) making decisions without any intervening steps.
• B) halving the highest values and doubling the lowest values to determine an acceptable forecast range.
• C) selecting the alternative that holds the greatest consensus within the management team.
• D) then conducting a sensitivity analysis to determine price elasticity.
• E) selecting the forecasting alternative that would allow a firm to survive financially even if the forecasts are incorrect.

Recognize how firms decide to stay in business or shut down based on comparisons of price with various costs.

Analyze scenarios involving firm efficiency and peak operating points.

Explain the relationship between total revenue, total cost, and profit maximization.

Comprehend the role of marginal cost in determining a firm's operational efficiency and supply decisions.

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