If the Price of a Movie Ticket Increases by 4

question 512

Multiple Choice

If the price of a movie ticket increases by 4 percent and the quantity of movies demanded falls by 2 percent, the price elasticity of demand is

• A) 2.0.
• B) 4.0.
• C) 0.5.
• D) some amount that cannot be determined without more information.

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Definitions:

P-value

The probability of obtaining test results at least as extreme as the observed results, assuming the null hypothesis is correct.

Sample Size

The number of units or observations collected from a population for the purpose of a statistical analysis.

Significance Level

Significance level is a threshold in hypothesis testing, denoting the probability of rejecting the null hypothesis when it is actually true, often set at 0.05 or 5%.

Power of the Test

The probability that the test correctly rejects the null hypothesis when the alternative hypothesis is true, indicating the test's effectiveness.