A company providing mobile phone service plans has a list of phone numbers for their 125,000 customers. The company is considering adding a new service that includes unlimited video streaming, as an add-on to existing data plans. A simple random sample of 256 customers is polled by the store and asked what they would be willing to pay per month to add the new service. The sample average of the responses is $10, and the sample standard deviation is $8. The histogram of the sample data is heavily skewed to the right. (a) Consider all 125,000 customers. The average of what they’d be willing to pay for the service is estimated as $________; this estimate is likely to be off by about $________ or so. (b) Can we use the normal curve to construct confidence intervals for this problem given that the histogram of the data does not look like the normal curve? Explain why.
A company providing mobile phone service plans has a list of phone numbers for
their 125,000 customers. The company is considering adding a new service that
includes unlimited video streaming, as an add-on to existing data plans. A simple
random sample of 256 customers is polled by the store and asked what they would
be willing to pay per month to add the new service. The sample average of the
responses is $10, and the sample standard deviation is $8. The histogram of the
sample data is heavily skewed to the right.
(a) Consider all 125,000 customers. The average of what they’d be willing to pay for
the service is estimated as $________; this estimate is likely to be off by about
$________ or so.
(b) Can we use the normal curve to construct confidence intervals for this problem
given that the histogram of the data does not look like the normal curve? Explain
why.
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