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    Hypothesis Testing (Z Testing)

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    A manufacturer believed he can get $1240 for his product. Wanting to prove his belief he collected a random sample of 64 potential buyers of his product and found on average they were willing to pay $1200 with a sample standard deviation of 100. If he tests at the  = .05 level what would he conclude?

    © BrainMass Inc. brainmass.com December 24, 2021, 8:07 pm ad1c9bdddf
    https://brainmass.com/statistics/hypothesis-testing/hypothesis-testing-testing-249992

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    Hypothesis testing (Z testing)
    5. A manufacturer believed he can get $1240 for his product. Wanting to prove his belief he collected a random sample of 64 potential buyers of his product and found on average they were willing to pay $1200 with a sample standard deviation of 100. If he tests at the α = .05 level what would he conclude?
    Solution:
    Hull hypothesis:
    H0: There is no significant difference in the mean of the product.
    H0: µ = 1240
    Alternative hypothesis:
    H1: µ ≠ 1240
    H1: There is a significant difference in the mean of the product.
    Level of significance:
    α =0.05
    Test statistic:

    The output is obtained by megastat
    Hypothesis Test: Mean vs. Hypothesized Value

    1,240.00 hypothesized value
    1,200.00 mean product
    100.00 std. dev.
    12.50 std. error
    64 n
    -3.20 z
    .0014 p-value (two-tailed)
    1,175.50 confidence interval 95.% lower
    1,224.50 confidence interval 95.% upper
    24.50 half-width

    Thus the value of the test statistic is -3.20

    Conclusion:
    Since p-value is less than 0.05 we have no enough evidence to accept the null hypothesis and hence we conclude that there is a significant difference in the mean of the product. i.e., H1: µ ≠ 1240

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 8:07 pm ad1c9bdddf>
    https://brainmass.com/statistics/hypothesis-testing/hypothesis-testing-testing-249992

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