An economic theory is a tested hypothesis. Hypothesis testing is an act in statistics whereby an analyst tests an assumption regarding a population parameter. The methodology employed by the analyst depends on the nature of the data used and the reason for the analysis. Hypothesis testing is used to infer the result of a hypothesis performed on sample data from a larger population.
What is the shape of the average fixed cost (AFC) curve?
A decrease in demand causes the equilibrium price to Fall. A decrease in demand and an increase in supply will cause a fall in equilibrium price, but the effect on equilibrium quantity cannot be determined.
Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is