Explain Why the Price of a Good Tends to Fall

question 37

Essay

Explain why the price of a good tends to fall when there is a surplus of the good.Give a hypothetical numerical example to help support your answer.

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Definitions:

Sample Size

The number of observations or data points collected for the purpose of statistical analysis.

One-Tail P-Value

The probability, in hypothesis testing, of observing a test statistic as extreme as, or more extreme than, the value observed under the assumption that the null hypothesis is true, in one direction.

Two-Tail Test

A statistical test in which the critical area of a distribution is two-sided and tests whether a sample is greater than or less than a certain range of values.

Critical Values

Specific points on the scale of a statistical distribution that are associated with a specified significance level, used for hypothesis testing.