A Financial Analyst Would Like to Construct a 95% Confidence

question 42

Short Answer

A financial analyst would like to construct a 95% confidence interval for the mean earnings of a company. The company's earnings have a standard deviation of $12 million. What is the minimum sample size required by the analyst if he wants to restrict the margin of error to $2 million?

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Definitions:

Producer Surplus

The difference between the amount a producer is willing to accept for a good or service and the actual price they receive.

Monopolist

An entity or individual that holds a monopoly, having exclusive control over the supply of a particular good or service in the market.

Marginal Cost

The uplift in collective cost emerging from the making of an additional unit of a good or service.

Producer Surplus

Producer surplus is the difference between what producers are willing to accept for a good or service versus what they actually receive, reflecting their economic benefit.