A 25% Decrease in the Price of Breakfast Cereal Leads

question 134

Multiple Choice

A 25% decrease in the price of breakfast cereal leads to a 20% increase in the quantity of cereal demanded. As a result:

• A)​total revenue will decrease.
• B)​total revenue will increase.
• C)​total revenue will remain constant.
• D)​the elasticity of demand will increase.

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Definitions:

Null Hypothesis

A statement used in hypothesis testing that assumes no effect or no difference in the performance or characteristics being tested.

Alternative Hypothesis

A statement in hypothesis testing that proposes a significant difference, effect, or relationship exists in the population, opposing the null hypothesis.

Test Statistic

A statistic whose calculated value is used to decide whether to reject the null hypothesis in a hypothesis test.

Population Distribution

The distribution of a characteristic within an entire population, described by parameters such as mean, variance, and standard deviation.