SCENARIO 15-1
-Referring to Scenario 15-1, what is the p-value associated with the test statistic for testing
Whether there is an upward curvature in the response curve relating the demand (Y)and the price
(X)?
A) 0.0001
B) 0.0006
C) 0.3647
D) None of the above.

Question

SCENARIO 15-1 
-Referring to Scenario 15-1, what is the p-value associated with the test statistic for testing
Whether there is an upward curvature in the response curve relating the demand (Y)and the price
(X)?
A) 0.0001 
B) 0.0006 
C) 0.3647 
D) None of the above.

Quizplus · Accepted Answer

The p-value is the probability of obtaining a test statistic as extreme as, or more extreme than, the observed test statistic, assuming that the null hypothesis is true. In this case, the null hypothesis is that there is no upward curvature in the response curve relating the demand (Y) and the price (X). The test statistic is the t-statistic for the coefficient of the squared price term in the regression model. The p-value for the t-statistic is 0.3647, which means that there is a 36.47% chance of obtaining a t-statistic as extreme as, or more extreme than, the observed t-statistic, assuming that the null hypothesis is true. This is not a statistically significant result, so we cannot reject the null hypothesis and conclude that there is an upward curvature in the response curve relating the demand (Y) and the price (X).

SCENARIO 15-1 -Referring to Scenario 15-1, What Is the P-Value Associated with P-Value