Question

A manufacturer produces both a deluxe and a standard model of an automatic sander designed for home use. Selling prices obtained from a sample of retail outlets follow. Model Price ($) Model Price ($) Retail Outlet Deluxe Standard Retail Outlet Deluxe Standard 1 39 27 5 40 30 2 39 28 6 39 34 3 45 35 7 35 29 4 38 30 The manufacturer's suggested retail prices for the two models show a $10 price differential. Use a .05 level of significance and test that the mean difference between the prices of the two models is $10. Develop the null and alternative hypotheses. H 0 = d H a = d Calculate the value of the test statistic. If required enter negative values as negative numbers. (to 2 decimals). The p-value is Can you conclude that the price differential is not equal to $10? What is the 95% confidence interval for the difference between the mean prices of the two models (to 2 decimals)? Use a t-table. ( , )

Answer 1

from above test statistic t =-1.16

p value =0.291

as p value is not less than 0.05 level we can not conclude that the price differential is not equal to $10

95% confidence interval for the difference between the mean prices =6.44 ; 11.27