If the Marginal Cost of Brewing Beer Is 40 Cents

question 74

Multiple Choice

If the marginal cost of brewing beer is 40 cents and the profit-maximizing price is 90 cents, then the price elasticity of demand is

• A)-2.
• B)-1.8.
• C)-2.33.
• D)-0.66.
• E)-3.

---

Definitions:

Sampling Distribution

The distribution of a statistic, like the mean or proportion, derived from a large number of samples of a specific size drawn from a specific population.

Mean

The average of a set of numbers, calculated by adding them up and dividing by the count of numbers.

Directional

In statistics, directional indicates that a hypothesis specifies the direction of an expected difference or relationship.

Alternative Hypothesis

In statistical testing, the hypothesis that proposes there is a statistically significant relationship or difference between two variables, as opposed to the null hypothesis.