A company is considering a rate change, either an increase or a decrease in production, where X_t = production in a time period; R_t = increase in production rate from Period t−1 to Period t; D_t = decrease in production rate from Period t−1 to Period t. Which of the following is correct? A) X_t − X_{t - 1} = D_t − R_t B) X_{t - 1} − X_t = D_t − R_t C) X_{t - 1} − X_t = R_t − D_t D) X_t − X_{t - 1} = R_t − D_t

Question

Quizplus · Accepted Answer

X_t − X_{t - 1} represents the change in production from Period t−1 to Period t. D_t − R_t represents the net change in production rate from Period t−1 to Period t. Therefore, the correct equation is X_t − X_{t - 1} = R_t − D_t.

A Company Is Considering a Rate Change, Either an Increase