Supply Function Under Different Market Structures
A supply function is a mathematical expression that represents the relationship between the units of quantity of a product or service demanded, its price, and other deterministic factors such as input costs, prices of substitutes, etc. The dependent variable is…
Price, Marginal Cost, Marginal Revenue, Economic Profit, and the Elasticity of Demand
Marginal revenue (MR) and marginal cost (MC) affect how a company makes its production decisions. Marginal cost (MC) refers to the increase in cost that is occasioned by the production of an extra unit. It is the additional cost of…
Market Structures
Market structure can be defined as the characteristics of a market, which can either be competitive or organizational. Moreover, market structure outlines the nature of the competition and the pricing procedure in a market. Therefore, market structure describes the number…
Resampling
Resampling refers to the act of repeatedly drawing samples from the original observed data sample for the statistical inference of population parameters. The following are the two commonly used methods of resampling: Bootstrap and jackknife. Bootstrap In the bootstrap resampling…
Considerations and Biases in Sampling
Sampling considerations refer to the desirable characteristics that should always be taken into account when selecting a sample, which in turn increase the chances of accurately estimating the population parameters. In general, larger samples are preferred to smaller ones. This…
Confidence Intervals
Confidence interval (CI) refers to a range of values within which statisticians believe the actual value of a certain population parameter lies. It is different from from a point estimate which is a single, specific numerical value.
Point Estimate and Confidence Interval Estimate
Point Estimate A point estimate gives statisticians a single value as the estimate of a given population parameter. For example, the sample mean X̄ is the point estimate of the population mean μ. Similarly, the sample proportion p is a…
Properties of an Estimator
A point estimator (PE) is a sample statistic used to estimate an unknown population parameter. It is a random variable and therefore varies from sample to sample. A good example of an estimator is the sample mean, \(x\), which helps…
Standard Error of the Sample Mean
The standard error (SE) of the sample mean refers to the standard deviation of the distribution of the sample means. It gives analysts an estimate of the variability they would expect if they were to draw multiple samples from the…
Central Limit Theorem
The central limit theorem asserts that when we have simple random samples, each of size n from a population with mean μ and variance σ2, the sample mean X approximately has a normal distribution with mean μ and variance σ2/n…
