Because Colgate Owns Patent Number 5,547,091, Only Colgate Sells Toothpaste

question 30

Multiple Choice

Because Colgate owns patent number 5,547,091, only Colgate sells toothpaste with a flip-top cap, while others use the more traditional screw top. A patent probably wasn't a necessary incentive for Colgate to develop the flip-top cap, so why did it patent the cap?

• A) to decrease the marginal cost of production
• B) to establish market power
• C) to decrease fixed costs
• D) to increase consumer demand for toothpaste

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Definitions:

Null Hypothesis

A default hypothesis that there is no significant difference or relationship between specified populations or variables.

Operating Characteristic

A function or curve that describes the discerning capacity of a statistical test, defining the probabilities of accepting a hypothesis over a range of values.

Sample Size

The number of individuals or observations used in a study, affecting its power and the precision of the results.

Type II Error

A statistical error that occurs when a false null hypothesis is not rejected, missing an actual effect or difference.