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Testing the Significance Level and Interpreting the P-Value

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The Butts Power Company forecasts that the mean residential electricity usage per household will be 700 kwh next January. In January, the company selects a simple random sample of 50 households and computes a mean and standard deviation of 715 and 50, respectively. Test at the .05 significance level to determine whether Butts Power's forecast is reasonable. Calculate and interpret the p-value for the test.

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Solution Summary

The solution gives detailed steps on performing a hypothesis testing using t distribution and interpreting the p-value.

Solution Preview

Let u be the mean residential electricity usage per household.

So we are testing Ho: u=700 vs. Ha: u>700.

So test ...

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