Question

The average price of automobiles sold by a dealership is $24500. The dealership own believes that the average price is higher. A sample of 400 cars sold showed that the average price per car is $25100. Define the null and alternative hypotheses

Answer 1

A null hypothesis in a statistical test can be defined as the hypothesis that there is no significant difference between specified populations values, any observed value taken from the samples.

The alternative hypothesis can be defined as the hypothesis which is used in hypothesis testing and it is contrary to the null hypothesis.

Since the average price of automobiles sold by a dealership is $24500, so it is population mean value and it will be null hypothesis in this case.

Ho; m=m_o

Since the average price of the sample of 400 is 25,100, so it will be alternative hypothesis.

H_A: m<m_o

Where;

m=$24,500

mo=$25,100