4% of Trucks of a Certain Model Have Needed New

question 12

Multiple Choice

4% of trucks of a certain model have needed new engines after being driven between 0 and 100 kilometres.The manufacturer hopes that the redesign of one of the engine's components has solved this problem.

• A)H0: p < 0.04 HA: p = 0.04
• B)H0: p > 0.04 HA: p = 0.04
• C)H0: p < 0.04 HA: p > 0.04
• D)H0: p = 0.04 HA: p < 0.04
• E)H0: p = 0.04 HA: p > 0.04

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Definitions:

Covert Collusion

An implicit or indirect agreement among competitors to fix prices, limit supply, or divide markets, without explicit communication or a formal agreement.

Gentlemen's Agreements

Informal, non-binding agreements between parties based on honor and not legally enforceable.

Formal Cartels

An agreement among competing firms to control prices, production, and market distribution, which is often illegal.

Cartel

An association of manufacturers or suppliers that maintains prices at a high level by restricting competition and output.