Q.2.A market researcher gives a presentation to a music industry executive. After considering the results of a test market examining whether or not lowering the price of in-store CDs will lower the number of illicit downloads of the same music, the executive claims: “The test market was conducted in eight cities. In two of the cities, lowering the price did not decrease illicit downloading. Therefore, lowering the price does not decrease this behavior and we should not decide to lower prices based on this research.” Comment on the executive’s conclusion. What type of inference is being made? Will the decision not to lower prices be a good one.
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