In: Statistics and Probability
The Arkansas Western Gas Company (AWGC) recently filed a rate increase request with the public service commission. The rate increase was calculated based on a mean consumption of 6400 cubic feet of natural gas per month per customer. In order to check this usage figure, the Arkansas attorney general’s office obtained a random sample of 21 AWGC customers and recorded the monthly usage for each. The sample mean was 6575 ft3. Assume that the distribution of natural gas consumption is normal with σ = 450. Conduct a one-sided, right-tailed hypothesis test with α = 0.05 and compute the p-value. Is there any evidence to suggest that the true mean usage is greater than 6400 ft3?