Monopolies Essay

1432 words - 6 pages

We often need to know something about a large population. Eg: What is the average number of hours per week devoted to online social networking for all US residents? It’s often infeasible to examine the entire population. Instead, choose a small random sample and use the methods of statistical inference to draw conclusions about the population. But how can any small sample be completely representative?

We can’t act as if statistics based on small samples are exactly representative of the entire population. Why not just use the sample mean x in place of μ? For example, suppose that the average hours for 100 randomlyselected US residents was x = 6.34. Can ...view middle of the document...

• Our conclusions will not always be correct. This problem is inevitable, unless we examine the entire population. • We can, however, control the probability of making an error. If we focus completely on what happened to us in our given sample, without putting it into the context of what might have happened, we can’t do statistical inference. The success of statistical inference depends critically on our ability to understand sampling variability.

The Sampling Distribution of X
Different samples lead to different values of x . But the sample was randomly selected! Therefore, X is a random variable, taking different values depending on chance. So X has its own distribution, called the sampling distribution.

[Sampling Lab Results]

The sampling lab results indicate that the sampling distribution of X is different from the distribution of the population. The sampling distribution has its own mean, variance, and shape, distinct from those of the population. The sampling lab results show that the variance of X based on a sample of size 5 seems to be less than the variance of the population. The average of the x values obtained seems quite close to the population mean. We now give some precise definitions.

Random Sample
A random sample (of size n) from a finite population (of size N) is a sample chosen without replacement so that each of the ⎛ N ⎞ ⎜n⎟ ⎝ ⎠ possible samples is equally likely to be selected. If the population is infinite, or, equivalently, if the sampling is done with replacement, a random sample consists of n observations drawn independently, with replacement, from the population. Hereafter, we assume that either the population is infinite, or else that N is sufficiently large compared to n that we can ignore the effects of having a finite population.

• Statistics (such as the sample mean x ) obtained from random samples can be thought of as random variables, and hence they have distributions, called theoretical sampling distributions. • In order for our inferences to be valid, it is critical that we get a random sample, as defined above. Suppose that a random sample, of size n, is taken from a population having mean μ and standard deviation σ. Although μ and σ are fixed numbers, their values are not known to us.

The Mean and Variance of X
• Even though we will only take one sample in practice, we must remember that the sample was selected by a random mechanism. • Therefore, X is a random variable! Its randomness is induced by the sampling procedure. If we had taken a different random sample, we might have gotten a different value for x . • Since X is a random variable, it must have a distribution. To draw valid inferences, we must take account of this sampling distribution, that is, we must think about all of the values that x might have taken (but didn’t).

• Since all distributions have means and variances, the distribution of X must also have a mean and a variance, denoted by μ x , σ 2 . x These quantities are given by the...

Other Papers Like Monopolies

Formation of Monopolies Essay

3818 words - 16 pages Zambezia (1991), XVII! 0). INDUSTRIAL DEMOCRACY IN ZIMBABWE? G. J. MAPHOSA Ziscosteel, Redcliff THIS ARTICLE SEEKS to provide a brief examination of Zimbabwe's industrial relations as seen, firstly, from my academic research during the period 1981-1985 in a mining company north of Harare and, secondly, from my intimate work knowledge and experience in a number of companies from 1981 to date. My emphasis is not so much on its history nor on the

Fo of History Essay

785 words - 4 pages Coursework 2 In economics, monopoly is a state of the market where there is only a single firm providing certain goods and services. The main reason for monopolies to exist is an apparent lack of competition in the industry. While in the past there were a large number of cases where monopolies exist, in the present, most of them has been restricted by the Competition law. There must be reasons why monopolies are considered “a threatâ

Monopoly Power

1008 words - 5 pages ) Although monopolies benefit from economies of scale, which enables them to earn super normal profits that give them the incentive to increase the quality of their product, they could still potentially reduce the quality of their goods as there is no pressure from competition and therefore, making them dynamically inefficient. Also, without competitors, they become productively inefficient by using their market power to restrict output and increase

Market Structures & Maximizing Pro

783 words - 4 pages , monopolies, and oligopolies. This paper will break the wrong assumptions that there is competition in every market. It will also help to understand the following four questions. What the characteristics of each market structure consists of? How is price determined in each market structure in terms of maximizing profits? How is output determined in each market structure in terms of maximizing profits? What are the barriers to entry, if any

Competition Poilicy

255 words - 2 pages ) – legitimate provided they expand markets and benefit consumers •efforts to open markets up to competition (liberalisation) – in areas such as transport, energy, postal services and telecommunications. Many of these sectors used to be controlled by state-run monopolies and it is essential to ensure that liberalisation is done in a way that does not give an unfair advantage to these old monopolies. •financial support (state aid) for companies from EU

Egt1 Task 3

1394 words - 6 pages Competency 309.1.3: Competition 1 Competency 309.1.3: Competition Western Governors University Competency 309.1.3: Competition Competency 309.1.3: Competition 2 A. In the years following the civil war, large trusts formed among key industries. These large monopolies were able to set prices, restrict output, and pressure resource suppliers. At the end of the nineteenth century the government began to intervene with the

Monopoly Implications on Resource and Welfare Allocation

2157 words - 9 pages Introduction; what is a monopoly? Monopolies are often considered a market form in which consumers do not have access to alternative producers. This is in many cases true, but there still exist monopolies with several producer options. In these monopolies a firm or cartel of companies is in control of the majority of the market. One example is Microsoft apparent monopoly in the operating system market where the competition has practically no

Opec Consultation

804 words - 4 pages Rebecca Morales OPEC CONSULTATION JANUARY 16, 2011 To begin let me start by defining what a monopoly, oligopoly and cartel are. A monopoly is any business, company, organization or firm that is the sole producer/seller in any given market. You usually see monopolies with companies that supplies electricity or phone service to an area. Those companies have complete control of the customer base in that particular market. When you have a

Anti Trust Laws

736 words - 3 pages I have chosen to write on antitrust laws. Antitrust laws enable a free market to thrive and flourish without the fear of monopolization. Monopolization in itself isn’t a bad thing. There are naturally occurring monopolies like public utilities and when a firm is the only producer of a particular good or service. This single firm or company because the scale of economies is so large that they can supply the entire market at a lower cost than any

Market Structure

1571 words - 7 pages , common resources, and natural monopolies are the four categories that goods are grouped in after determining if the good is excludable or rival in consumption. The break down of a market consists of monopolies, oligopolies, perfect competition, and monopolistic competition. According to Mankiw (2007), public goods are neither excludable nor rival in consumption. Examples of public goods are national defense and fire alert system. Public goods

Market Structures

2261 words - 10 pages how many other firms are producing roughly the same products, however, they do consider competition and keep their prices as low as possible to try and retain the price advantage over other firms in this industry while still making a considerable profit. It is difficult to enter into this industry because of the barriers to entry that are imposed. And last but certainly not least, we have monopolies. This market structure rules the roost. There

Related Essays

Pure Monopolies Essay

533 words - 3 pages DO PURE MONOPOLIES EXIST Page 2 Do Pure Monopolies Exist? Thesis Statement: According to the Essentials of Economics textbook a monopoly is defined as "a market structure in which the number of sellers is a small that each seller

Do Monopolies Exist? Essay

561 words - 3 pages Week Three Assignment: Do Monopolies Exist? Name Ashford University Eco 100 Instructor Date Week Three Assignment: Do Monopolies Exist? To answer the question of the existence of monopolies does not require an extensive discovery process. A simple flick of the light switch on the way out to mail a letter should be enough evidence to convince an otherwise skeptical public of the existence of monopolies. A monopoly

The Affect Of Monopolies In Microeconomics

933 words - 4 pages The Affects of Monopolies on Our current Microeconomic Situation More than anything else, the progress of the world in the 21st century depends on economics. The microeconomic situation of the United States has several determining factors contributing to it's current status. What we earn, what we save, what we spend, how deligently we work and retain our jobs is all part of the microeconomic system that controls our daiy lives. Another

The Economy, Monetary Policy, And Monopolies

1496 words - 6 pages The Economy, Monetary Policy, and Monopolies A Robinson Dr Ralph Cann-Tamakloe Principles of Economics 100 May 26, 2012 Analyze the current economic situation in the U.S. as compared to five (5) years ago. Include interest rates, inflation, and unemployment in your analysis. The United States is the most technologically advance country in the world, not to mention the largest