Question

In: Statistics and Probability

The manufacturer of an MP3 player wanted to know whether a 10% reduction in price is...

The manufacturer of an MP3 player wanted to know whether a 10% reduction in price is enough to increase the sales of its product. To investigate, the owner randomly selected eight outlets and sold the MP3 player at the reduced price. At seven randomly selected outlets, the MP3 player was sold at the regular price. Reported below is the number of units sold last month at the regular and reduced prices at the randomly selected outlets.

Regular price 131 124 89 113 114 125 94
Reduced price 125 132 111 107 115 124 136 132

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At the 0.050 significance level, can the manufacturer conclude that the price reduction resulted in an increase in sales? Hint: For the calculations, assume reduced price as the first sample.

  1. Compute the pooled estimate of the variance. (Round your answer to 3 decimal places.)

  1. Compute the test statistic. (Round your answer to 2 decimal places.)

  1. State your decision about the null hypothesis.

  • Fail to reject H0

  • Reject H0

Solutions

Expert Solution

orchestra answered 11 months ago
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