3. TV Commercials. Marketing experts for a national electronics store chain clai

Question

3. TV Commercials. Marketing experts for a national electronics store chain claim that localized TV commercial advertisements will significantly increase the sales of Amazon Echo devices in their stores. In order to test this, a summer marketing intern from Iowa State developed an TV advertisement to show in local markets in hopes of showing that commercials will result in significant sales of Echo devices in stores in the following week. Suppose the intern hasa random sample of 30 stores that agree to show the advertisements locally, and that as a result the average increase in Echo sales over the next month was 15.2 units per store, with a standard deviation of s- 27.5

Explanation / Answer

a)
Option C: True avergee increase in Amazon Echo sales by all stores in the population

b)
i) H0: mu = 0 , Ha: mu > 0

ii)
Test statistics, t = 15.2/(27.5/sqrt(30)) = 3.0274

iii)
p-value = P(T > t) = 0.0025

iv)
p-value indicates the probability that average increase in sales is greater than 15.2 is 0.0025

v)
Option A: Reject null hypothesis

vi)
There are significant evidence to conclude that average increase in sales is greater than before advertisement.

vii)
Type I error would occur if we incorrectly reject the null hypothesis.

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