Of 60 active listings tracked during one period, 15 different listings took at least one list-price reduction. What is the list-price reduction rate as a share of tracked listings?
Correct Answer
A) 0.25 ratio
Incidence=15 distinct listings with a reduction/60 tracked listings=0.25. Interpret this statistic only under the stated sample and timing definitions, without an automatic causal or forecasting inference. Common errors: dividing by the listings without a reduction gives 0.33 ratio; reporting the share without a reduction gives 0.75 ratio; inverting the ratio gives 4.00 ratio.
Why This Is the Correct Answer
Option A is correct because the incidence is 15 listings with a reduction divided by 60 tracked listings, which equals 0.25. Each listing is counted once over the same period and population. The result describes the sample only and does not by itself prove a cause or forecast.
Why the Other Options Are Wrong
Option B: 0.33 ratio
Option B is wrong because 0.33 comes from dividing the 15 reduced listings by the 45 listings without a reduction (15/45 = 0.33). The denominator must be all 60 tracked listings, giving 15/60 = 0.25.
Option C: 0.75 ratio
Option C is wrong because 0.75 is the share of listings without a reduction (45/60 = 0.75). The question asks for the share with a reduction, which is 15/60 = 0.25.
Option D: 4.00 ratio
Option D is wrong because 4.00 comes from inverting the ratio (60/15 = 4.00). The correct calculation puts reduced listings over total listings: 15/60 = 0.25.
Part over whole
An incidence rate is the part that had the event divided by the whole group tracked.
How to use: Use this to set up any share or rate question before dividing.
Exam Tip
Check that the denominator is the full tracked group; a rate above 1.00 for a share is a sign the ratio was inverted.
Common Mistakes to Avoid
- -Dividing by listings without a reduction instead of all listings
- -Reporting the share without a reduction
- -Inverting the ratio
Concept Deep Dive
Analysis
This question tests a simple ratio: the share of tracked listings that took at least one price cut. The numerator is the 15 listings with a reduction, and the denominator is all 60 tracked listings. Distractors come from using the wrong numerator or denominator or inverting the ratio.
Background Knowledge
List-price reduction incidence is one indicator of seller pricing pressure, alongside expired and withdrawn listings and pending sales. A rising share of price cuts can suggest softening conditions. Like any market statistic, it depends on a consistent definition of the sample and time period.
Real-World Application
An appraiser reviewing local listings finds that 15 of 60 active listings had a price cut during the quarter. She reports a 25% reduction incidence and considers it alongside sale-to-list ratios when describing market conditions.
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