If you were building a hypothesis test to determine whether or not the price elasticity of demand for your product is -3.0, which of the following would be a natural null hypothesis? A) H₀: Price Elasticity of Demand = 0 B) H₀: Price Elasticity of Demand = 1 C) H₀: Price Elasticity of Demand = -3.0 D) H₀: Price Elasticity of Demand = -1

Question

Quizplus · Accepted Answer

The null hypothesis for a hypothesis test is usually a statement that the parameter being tested is equal to a specific value. In this scenario, the null hypothesis should state that the price elasticity of demand equals a specific value, which is -3.0. Therefore, the correct null hypothesis would be "H₀: Price Elasticity of Demand = -3.0".

If You Were Building a Hypothesis Test to Determine Whether