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Answer:
And we can use the following excel code to find it:
"=NORM.DIST(-2.4,0,1,TRUE)"
Step-by-step explanation:
Data given and notation
n=100 represent the random sample taken
estimated proportion of interesst
is the value that we want to test
represent the significance level
z would represent the statistic (variable of interest)
represent the p value (variable of interest)
Concepts and formulas to use
We need to conduct a hypothesis in order to test the claim that the proportion is lower than 0.5:
Null hypothesis:
Alternative hypothesis:
When we conduct a proportion test we need to use the z statistic, and the is given by:
(1)
The One-Sample Proportion Test is used to assess whether a population proportion is significantly different from a hypothesized value
.
Calculate the statistic
Since we have all the info requires we can replace in formula (1) like this:
Statistical decision
It's important to refresh the p value method or p value approach . "This method is about determining "likely" or "unlikely" by determining the probability assuming the null hypothesis were true of observing a more extreme test statistic in the direction of the alternative hypothesis than the one observed". Or in other words is just a method to have an statistical decision to fail to reject or reject the null hypothesis.
The next step would be calculate the p value for this test.
Since is a left tailed test the p value would be:
And we can use the following excel code to find it:
"=NORM.DIST(-2.4,0,1,TRUE)"
If the price-elasticity of demand for chips is 0.75, then a 20 percent increase in price would result in a 15 percent decrease in the demand quantity.
As per the question statement, the price-elasticity of demand for chips is 0.75 and there is a 20 percent increase in price.
We are required to calculate the resulting decrease in the demand quantity by percent, based on the conditions mentioned in the statement above.
Here, given Price-Elasticity of Demand = 0.75
Also given the percent increase in price = 20
Now, we know that,
= [(Percentage change in quantity demanded)/(Percentage change in price]
Or, [0.75 = (x/20)]...[Assuming "Percentage change in quantity demanded" to be "x"]
Or, [x = (20 * 0.75)]
Or, [x = 15]
That is, If the price-elasticity of demand for chips is 0.75, then a 20 percent increase in price would result in a 15 percent decrease in the demand quantity.
- Price-Elasticity of Demand: Price Elasticity of Demand is a measurement of the change in the consumption of a product in relation to a change in its price and is expressed mathematically as the quotient of (Percentage Change in Quantity Demanded) divided by (Percentage Change in Price)
To learn more about Price-Elasticity of Demand, click on the link below.
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