If a 20 Percent Reduction in the Price of Airline

question 145

Multiple Choice

If a 20 percent reduction in the price of airline tickets between Chicago and New York leads to a 50 percent increase in the quantity of tickets purchased, the price elasticity of demand for the tickets is

• A) − 0.20.
• B) − 0.40.
• C) − 0.50.
• D) − 2.50.

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Definitions:

Sample Statistic

A numerical measure that describes an aspect of a sample taken from a population, such as the mean or variance.

Friedman Test

A statistical test that doesn't rely on parameter assumptions to identify variations in treatments over several trials.

Sign Test

A nonparametric test used to determine if there is a median difference between paired observations.

Population Location

A statistical term that refers to identifying the central position of a population distribution.