In a Local Community There Are Three Grocery Chain Stores

question 86

Multiple Choice

In a local community there are three grocery chain stores.The three have been carrying out a spirited advertising campaign in which each claims to have the lowest prices.A local news station recently sent a reporter to the three stores to check prices on several items.She found that for certain items each store had the lowest price.This survey didn't really answer the question for consumers.Thus,the station set up a test in which 20 shoppers were given different lists of grocery items and were sent to each of the three chain stores.The sales receipts from each of the three stores are recorded in the data file Groceries. Based on a significance level of 0.05 and these sample data,test to determine whether blocking was necessary in this example.Use a test-statistic approach.

• A)Since 952.6155 > 1.8673 do not reject H₀ and conclude that there is an indication that blocking was not effective.
• B)Since 952.6155 > 1.8673 reject H₀ and conclude that there is an indication that blocking was effective.
• C)Since 102.2912 > 1.8673 do not reject H₀ and conclude that there is an indication that blocking was not effective.
• D)Since 102.2912 > 1.8673 reject H₀ and conclude that there is an indication that blocking was effective.

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production.

Purely Competitive

A market structure characterized by many sellers offering identical products, leading to a high degree of competition.

Purely Competitive

A market structure characterized by many buyers and sellers, with all firms selling identical products and no single buyer or seller able to influence the market price.

Imperfectly Competitive

Referring to market structures that do not meet the conditions of a perfect competition, often characterized by a small number of sellers, product differentiation, or barriers to entry.