A publishing company has just published a new college textbook, Before the company decides the price at which to sell the textbook, it wants to know the average price of all such textbooks in the market.

A publishing company has just published a new college textbook, Before the company decides the price at which to sell the textbook, it wants to know the average price of all such textbooks in the market. The research department at the company took a random sample of 36 comparable textbooks and collected information on their prices. This information produced a mean price of $145 and standard deviation 35 for this sample. An advertisement for a book store said the average price of all such college textbooks is $130.

---We want to know if the mean price of all such textbooks is $130 as advertised. Do an appropriate hypothesis test.

a. Null and alternative hypothesis statement.

b. Calculate the test statistic:

c. Use significance level 0.1 to find the critical value.

d. Give a conclusion that a non-statistician can understand.

e. Construct a 90% confidence interval for the mean price of all such college textbooks.

f. What does the 90% confidence interval tell about the mean price of all such college textbooks.

Expert Solution

a-d)

e)

f) The confidence interval do not include 130

Hence we can reject the null hypothesis that the mean price of all such textbooks is $130 as advertised

orchestra answered 2 years ago

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