Question

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	133	123	89	117	117	127	94
Reduced price	125	137	151	137	113	122	134	132

  Click here for the Excel Data File

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.)

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

3. State your decision about the null hypothesis.

• Reject H₀

• Fail to reject H₀

Answer 1

The statistical software output for this problem is:

Hence,

a) Pooled estimate = 198.100

b) Test statistic = 2.35

c) Reject Ho