Question

1. Two suppliers of dairy products were suspected of price fixing their bids for a contract to supply milk to the schools in an area, known as Tri-County, of northern Kentucky. (That is, they were thought to have secretly divided up the area and agreed to not price their bids competitively so the schools would end up paying more regardless of which supplier they chose. This type of agreement is illegal). The file "Extra HW 1 Milk Price" contains the winning bid for contracts in various districts in the Tri-County area as well as the winning bids for contracts in a number of surrounding areas where there were also other suppliers bidding. Use 0.05 significance and answer the following.

   a. Whatareappropriatehypothesesforatestdesignedtoverifyevidenceofpricefixing?

2. b. Findtheappropriatet-scoreandP-value.

3. c. StatetheconclusionofthetestinanEnglishsentence.

Answer 1

(a) The hypothesis being tested is:

H0: p1 = p2

Ha: p1 ≠ p2

(b)

p1	p2	pc
0.6791	0.9804	0.7622	p (as decimal)
91/134	50/51	141/185	p (as fraction)
91.	50.	141.	X
134	51	185	n
	-0.3013	difference
	0.	hypothesized difference
	0.0701	std. error
	-4.30	z
	1.70E-05	p-value (two-tailed)

The test statistic is -4.30.

The p-value is 0.0000.

(c) Since the p-value (0.0000) is less than the significance level (0.05), we can reject the null hypothesis.

Therefore, we can support the claim.