A manufacturer produces both a deluxe and a standard model of an automatic sande

Question

A manufacturer produces both a deluxe and a standard model of an automatic sander designed for home use. Selling prices obtained from a sample of retail outlets follow. a. The manufacturer's suggested retail prices for the two models show a $10 price differential. Use a .05 level of significance and test that the mean difference between the prices of the two models is $10. Develop the null and alternative hypotheses. Calculate the value of the test statistic. If required enter negative values as negative numbers, (to 2 decimals). The rho-value is Can you conclude that the price differential is not equal to $10? b. What is the 95% confidence interval for the difference between the mean prices of the two models (to 2 decimals)?

Explanation / Answer

a)

D=EDi/n

   =62/7

   =8.857

S=E(Di-D)^2/n-1

     =40.857/6

     =2.61

tSTAT=D-m/SD/n

        =8.857-10/2.61/7

        =-1.16

The P-Value is .290117.

b)

Confidence interval:-

D+- ta/2*SD/n

8.857+-2.447*0.9863

LCL=8.857-2.413=6.44

UCL=8.857+2.413=11.27

(6.44,11.27)

Retail Outlet Deluxe Standard Difference (Di) (Di-D) (Di-D)^2 1 39 27 12 3.142857143 9.87755102 2 39 28 11 2.142857143 4.591836735 3 45 35 10 1.142857143 1.306122449 4 38 30 8 -0.857142857 0.734693878 5 40 30 10 1.142857143 1.306122449 6 39 34 5 -3.857142857 14.87755102 7 35 29 6 -2.857142857 8.163265306 62 40.85714286

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