Question

Part A: A manufacturer of a brand of designer jeans realises that many retailers charge less than the suggested retail price of $100. The manufacturer provides you with the information she collects from a random sample of 12 retailers and asks you to perform some statistical analysis to have some statistical evidence on this realisation. You find that the mean of prices of the jeans is $70 and find the 95% confidence interval for the mean retail price of jeans that follows a normal distribution with the standard deviation of prices equal to $10.

The 95% CI is [CIL, CIU] = [Answer , Answer ] You infer that Answer because Answer You are not convinced of this outcome because the Answer You emphasise that we need n ≈ Answer such that the parameter estimate lies within $3 of the true price with 95% confidence.

Part B: Suppose that the true average price of Jeans is $76. Using the information above, the probability that price of the jeans is undercharged at the sampled retail stores is Answer .

Answer 1