With the extra profits generated from the new customers, Jacobi is considering expanding his product range. He is interested in stocking a new type of motorcycle headset camera. To fit with current business plans, the new product would have to generate a minimum of 37.5% margin to be worthwhile. With that in mind, he hypothesises that customers will be willing to pay at least $350 for this product, which is the minimum sale price for it to be viable at the specified margin. To test if his belief is true, Jacobi hires a market researcher (you) to determine how much customers may be willing to pay for this product. You collect data from a sample of 100 motorcycle enthusiasts, all of whom resemble Jacobi’s usual clientele, and determine that the average amount people are willing to pay is $364, with a standard deviation of $35. Using this information, you conduct a hypothesis test at a 5% level of significance to check whether Jacobi’s belief is justified and to help him
With the extra profits generated from the new customers, Jacobi is considering
expanding his product
headset camera. To fit with current business plans, the new product would have to
generate a minimum of 37.5% margin to be worthwhile. With that in mind, he
hypothesises that customers will be willing to pay at least $350 for this product,
which is the minimum sale price for it to be viable at the specified margin.
To test if his belief is true, Jacobi hires a market researcher (you) to determine how
much customers may be willing to pay for this product. You collect data from a
sample of 100 motorcycle enthusiasts, all of whom resemble Jacobi’s usual
clientele, and determine that the average amount people are willing to pay is $364,
with a standard deviation of $35.
Using this information, you conduct a hypothesis test at a 5% level of significance to
check whether Jacobi’s belief is justified and to help him decide whether to stock
this product.
a) is it a tw tailed, left tailed r right tailed test
b) is it Z test or T test
C) what is the P value
d) judging by the Z or Test and P value, do we reject the null hypothesis
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Hypothesis testing · In the spaces below, complete each step of the Six-Step Process of Hypothesis Testing · Include the necessary information for each step
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Step 1 (set up null and alternative hypotheses) |
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Step 2 (determine test statistic and formula) |
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Step 3 (specify the alpha) |
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Step 4 (define decision rule) |
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Step 5 (calculate test statistic) |
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Step 6 (answer research question) |
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