Price Gouging Occurs When Retailers Take Advantage of the Unfortunate

question 18

Multiple Choice

Price gouging occurs when retailers take advantage of the unfortunate circumstances of others to charge exorbitant prices for needed products.This practice frequently occurs after a significant natural disaster.Suppose an area experiences a devastating hurricane and authorities suspect price gouging occurred.The average price for a gallon of milk in the area was $2.34 prior to the hurricane.If after the hurricane a sample 10 stores finds the average price is now $3.05 with a standard deviation of $0.98, does it appear that the average price of milk increased significantly after the hurricane? State the critical value (CV) , test statistic (TS) , and decision from the test, and state the null hypothesis.(Use α = 0.05.)

• A) CV = 1.8331; TS = 2.29; reject H₀: there is probably no price gouging
• B) CV = 1.8125; TS = 0.72; fail to reject H₀: there is possibly price gouging
• C) CV = -1.8125; TS = -0.72; fail to reject H₀: there is probably no price gouging
• D) CV = -1.8331; TS = 2.29; fail to reject H₀: there is possibly price gouging

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Definitions:

Sampling Distribution

A distribution of probabilities for a statistic that is acquired by drawing numerous samples from a particular population.

Margin of Error

An expression of the amount of random sampling error in a survey's results, which indicates the precision of the estimates.

Network News Programs

Television broadcasts that provide viewers with updates on daily news, including local, national, and international events.

Confidence Estimate

A range or value that reflects the degree of certainty, or confidence, about a particular statistical parameter.