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Null Hypothesis

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Carpetland salespersons average $8000 per week in sales. Steve Contois, the firmâ??s vice president, proposes a compensation plan with new selling incentives. Steve hopes that the results of a trial selling period will enable him to conclude that the compensation plan increases the average sales per salesperson.

a) What is the null hypothesis to be tested in this trial (which is in effect a sample)?

b) What would be the implications of making a Type I error in this specific situation?

c) What would be the implications of making a Type II error in this specific situation?

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Solution Summary

The solution provides the correct null hypothesis and implications of making a Type I error and type II error.

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Carpetland salespersons average $8000 per week in sales. Steve Contois, the firm’s vice president, proposes a compensation plan with new selling incentives. Steve hopes that the results of a trial selling period will ...

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