If the Absolute Value of the Price Elasticity of Demand

question 20

Multiple Choice

If the absolute value of the price elasticity of demand for DVD movies is 0.8 then the elasticity of demand for the DVD for the movie The Hangover should be

• A) less then 0.8 in absolute value.
• B) greater than 0.8 in absolute value.
• C) equal to 1 in absolute value.
• D) equal to zero because the DVD of this movie has been out for several years.

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Definitions:

Sum Squares Error (SSE)

The total deviation of the observed values from their mean, a measure used in statistics to describe the discrepancy between the data and an estimation model.

Sum Squares Treatments (SST)

The total variation attributed to the differences among group levels in an analysis of variance.

ANOVA Model

A statistical method (Analysis of Variance) used to compare means across three or more groups for statistical significance.

Sum Squares Treatments (SST)

The total variation attributed to different treatments in an analysis of variance (ANOVA) context, measuring the difference between treatment means and the overall mean.