A Pharmaceutical Company Has a Drug They Think Is Better

Multiple Choice

A pharmaceutical company has a drug they think is better at lowering blood pressure than the current medication, but it costs more money for consumers. They conduct a significance test on their clinical study (H₀: The new drug works the same as the old drug, Ha: The new drug works better than the old drug.) Which statement about errors is correct?

A) A Type I error means people pay more money for a drug that doesn't work better.
B) If they reject the null hypothesis, it is possible that they are rejecting a Type II error.
C) A Type I error means people keep using the old drug when a new drug works better.
D) If they fail to reject the null hypothesis, they might be committing a Type I error.
E) A Type II error would mean that they did not use randomization in their experiment.