April Runs a Small Bakery in Northern Minnesota

question 101

Multiple Choice

April runs a small bakery in northern Minnesota.Her most popular item is her homemade cranberry scone.As a pricing experiment,April raises the price of her raspberry scones by 5 percent and sees daily sales fall by 2 percent.From this experiment,April can estimate the price elasticity of demand for her cranberry scones as approximately ________.

• A) 0.4 percent
• B) 2 percent
• C) 2.5 percent
• D) 5 percent

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Definitions:

Pooled Variance

An estimate of the common variance of two or more groups that is weighted by the degrees of freedom of each group.

Standard Error

The standard deviation of the sampling distribution of a statistic, often used to quantify the accuracy of a sample mean.

Independent Samples

Samples from different populations in which the selection of one sample does not influence or affect the selection of the other sample.

Point Estimate

A single value given as an estimate of a population parameter, often derived from sample data.