Eleven Consumers Are Trying to Decide Whether to Connect to a New

question 6

Multiple Choice

Eleven consumers are trying to decide whether to connect to a new communications network.Consumer 1 is of type 1, consumer 2 is of type 2, consumer 3 is of type 3, and so on.Where k is the number of consumers connected to the network (including oneself) , a consumer of type n has a willingness to pay to belong to this network equal to k times n.What is the highest price at which 11 consumers could all connect to the network and either make a profit or at least break even?

• A)$12
• B)$10
• C)$1
• D)$0
• E)$11

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Definitions:

Factor A Levels

Factor A Levels refer to the different categories or values that an experimental factor, known as Factor A, can assume in an experiment.

Significance Level

A threshold in hypothesis testing that defines the probability of rejecting a true null hypothesis, commonly denoted by alpha (α).

Test Statistic

A numerical value calculated from a sample used in statistical hypothesis testing to determine whether to reject the null hypothesis.

Normal Distribution

A probability distribution characterized by its symmetry surrounding the mean, demonstrating that data points close to the mean occur more frequently than those at a greater distance.