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Regression Equation/Short Run Cost

Please complete the following two questions:

1. Which indicator(s) will always improve when more variables are added to a regression equation?

2. A firm experiences increasing returns to scale; that is, doubling all its inputs more than doubles its output. What can be inferred about the firm's short-run costs?

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Solution Preview

Answer 1: R square will always improve when more variables are added to a regression equation. To compensate for this, statisticians ...

Solution Summary

This solution provides a brief and concise discussion of less than 100 words on the subject of regression and short-run costs.

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