Frederick Is Interested in Whether Residents of His Community Are

question 39

Essay

Frederick is interested in whether residents of his community are opposed to the construction of a party store on the corner of a busy intersection. He randomly polls 150 residents in the community and receives responses from 55 residents. Of those who responded, 60% were opposed to the construction of the party store in the community so Frederick concludes that the majority of residents in his community oppose the construction of the party store. Explain what is wrong with this approach.

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Definitions:

Competitive Equilibrium

A state in a market where the supply of goods matches demand, with no incentive for price change, resulting from the competition among many buyers and sellers.

Factors Of Production

Inputs into the production process (e.g., labor, capital, and materials).

Profit

The financial gain made in a transaction or operation, calculated as the difference between the revenue earned and the costs incurred.

Short Run

A time period in economic analysis during which at least one factor of production is fixed, influencing the firm's decisions on output and pricing.