Question

Caption: As you prepared your memo about the new “Princess Select” line, you discovered that
the sample size that you were provided was insufficiently small. Using a larger sample of 200
customers, you conducted this research and the data is now ready for your analysis.
The following results were found:
1. Sample mean for price was $49.20 with a standard deviation of $4.60
2. Proportion who would purchase the new product was 62%
Mieke: You have the new data already? Great. So, like I said previously, at least 75% of the
customers must express some desire for the product. The customers who are interested in the
product must be willing to pay at least $49.00.

Using this information, complete the following:
1. Conduct hypothesis tests for price and proportion.
2. Based on this updated data and Mieke’s parameters, should the new line be marketed?
Explain your answer.

Answer 1

1:

For price:

Conclusion: There is no evidence to conclude that the customers who are interested in the product must be willing to pay at least $49.00.

For proportion:

Conclusion: There is no evidence to conclude that at least 75% of the customers must express some desire for the product.

(b)

Based on the results that we can say that customers are interested in the product and willing to pay at least $49.00. We cannot conclude that  at least 75% of the customers must express some desire for the product but the proportion of customers desire to buy the product is fairly good. So  the new line should be marketed.