When We Test H₀: P₁ - P₂ ≤ $\hat { p } _ { 1 }$

question 9

Essay

When we test H₀: p₁ - p₂ ≤ .01,H_A: p₁ - p₂ > .01 at α = .05 where $\hat { p } _ { 1 }$
= .08, $\hat { p } _ { 2 }$
= .035,n₁ = 200,n₂ = 400,can we reject the null hypothesis?

---

Definitions:

Perfectly Competitive Firm

A company that operates in a market where there are many buyers and sellers, the product is homogeneous, and there are no barriers to entry or exit.

Normal Profit

Normal profit occurs when a firm's total revenue is equal to its total costs, including the opportunity costs of capital, providing no incentive for entry or exit in the industry.

Yearly Licensing Fee

An annual charge paid to obtain the rights to use a particular piece of intellectual property, software, or other specific products/services.

Market Price

The ongoing rate at which an asset or service is offered for buying or selling in a certain market.