Suppose That You Were Interested in Building a Luxury Apartment

question 27

Multiple Choice

Suppose that you were interested in building a luxury apartment complex in your hometown. In your analysis of local demographics, you discover that the target market makes up only 5% (core market share) of the households that currently rent (or would be interested in renting) in this town. If market experts believe that a total of 5,000 apartment units will be rented in your entire hometown within the next year, what is the projected number of units the developer could expect to lease in year 1 if he is able to capture 20% of the market potential?

• A) 1000 units
• B) 500 units
• C) 250 units
• D) 50 units

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Definitions:

Sample Proportion

The fraction of the sample that shares a particular trait or characteristic.

Sampling Distribution

The probability distribution of a given random-sample-based statistic, used to make inferences about a population.

Simple Random Samples

A subset of individuals chosen from a larger set, where each individual is chosen randomly and entirely by chance.

Population

The entire pool from which a statistical sample is drawn and to which the results of analysis will be generalized.