Question

A retail company has started a new advertising campaign in order to increase sales. In the past, the mean spending in both the 18–35 and 35+ age groups was at most $70.00.

a. Formulate a hypothesis test to determine if the mean spending has statistically increased to more than $70.00.

b. After the new advertising campaign was launched, a marketing study found that the sample mean spending for 400 respondents in the 18–35 age group was $73.65, with a sample standard deviation of $56.60. Is there sufficient evidence to conclude that the advertising strategy significantly increased sales in this age group with significance level of 5%?

c. For 600 respondents in the 35+ age group, the sample mean and sample standard deviation were $73.42 and $45.44, respectively. Is there sufficient evidence to conclude that the advertising strategy significantly increased sales in this age group with significance level of 5%?

Answer 1