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Hypothesis test, Decision Rule, and Test Statistics

A consumer magazine randomly selected 100 new hybrid car dealers from across the country, and created a list of retail prices. They want to know if the price differs from $25,000.
RQ: Is the average hybrid car dealer retail price different than $25,000 with a 95% confidence level? Use Alpha = .05
A. Choose the Hypothesis
H1: μ≠ $25,000. The mean hybrid car retail price is different than $25,000 with a 95% confidence level.
B. Specify the Decision Rule
C. Calculate the Test Statistic, P-value
D. Make the Decision
E. Give an interpretation of the Decision

Attach your Excel document with calculations.

Solution Preview

Let μ be the average hybrid car dealer retail price

A. Choose the Hypothesis
H0: μ=25000 or the average hybrid car retail price is $25,000.
H1: μ≠ $25,000 or the average hybrid car ...

Solution Summary

The solution gives detailed steps on performing a hypothesis testing (5 step procedure). All the formula and calcuations are shown and explained. An excel output is also included.

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