Using Excel, the manager of Quick Breaks Coffees has estimated the daily demand function for its regular coffees; the results are shown in the table above. Using 95 percent confidence, the P- value for the slope coefficient on price suggests which of the following is true?
A)The true slope coefficient is less than the critical value.
B)The true slope coefficient exceeds the critical value.
C)The true slope coefficient is nonzero.
D)The true slope coefficient is zero.

Question

Quizplus · Accepted Answer

A P-value is used in hypothesis testing to help you support or reject the null hypothesis. The null hypothesis typically states that there is no effect or that a parameter is equal to zero. If the P-value is low (usually below 0.05 for a 95% confidence level), it indicates that the observed data are unlikely under the null hypothesis. In this context, a low P-value for the slope coefficient suggests that the true slope coefficient is significantly different from zero, implying it is nonzero.

Using Excel, the Manager of Quick Breaks Coffees Has Estimated