Scenario A. Movie executives are always looking at the bottom line, and even though a movie might make a huge amount of money, they might still consider it a “flop”. So, before greenlighting a new (but expensive to produce) movie, executives run a study to see if the budget is too high to recoup a future profit. They project that the movie’s budget is low enough to justify making the movie, as it is a good bet it will make a profit of at least $1. You think they made the correct call. Which is the null hypothesis? A.H0: profits = no profit (or $0) B.H0 profits > $0

Question
Asked Mar 20, 2019

Scenario A. Movie executives are always looking at the bottom line, and even though a movie might make a huge amount of money, they might still consider it a “flop”. So, before greenlighting a new (but expensive to produce) movie, executives run a study to see if the budget is too high to recoup a future profit. They project that the movie’s budget is low enough to justify making the movie, as it is a good bet it will make a profit of at least $1. You think they made the correct call. Which is the null hypothesis?

A.H0: profits = no profit (or $0)

B.H0 profits > $0

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Expert Answer

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Given movie executives are always looking at the bottom line, and even though a movie might make a huge amount of money, they might still consider it a “flop”.

So it is very important to make sure is  budget not too high. So a study is performed to see i...

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Hypothesis Testing

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