Uncertainty influences the estimation of costs, revenues and hence the ...............
decisions of the firm
Under uncertainty the future values of costs and revenues are not known exactly, so they can only be estimated with a margin of error.
Every choice of the firm (output, price, input mix, investment, insurance cover) is made by comparing these estimated costs and revenues.
So uncertainty in the estimates is carried into all the choices that rest on them, i.e. into the decision making of the firm as a whole.
Profits are the outcome that follows the decisions, while investments and insurance policy are only particular kinds of decisions, so the general effect is on decisions.
Hence, decisions of the firm.
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