According to the National Automobile Dealers Association, the mean price for use

Question

According to the National Automobile Dealers Association, the mean price for used cars is $ 10,124 at national level, with a standard deviation of $ 500. The manager of a Kansas car dealer believes they offer same price for a car, on average, as the national average. The chief sales man on the other hand, argues that their price is higher and is driving sales down. You are hired to collect a sample of 100 cars, which show an average price of $ 10,000, and to perform a statistical test to help on a possible decision regarding car prices at the store. Allow for a 10% error on your test.

1) The critical value for this problem is?

2) The standard error is equal to?

3) The test statistic is equal to?

4) Your decision after the test is?

5) The p-value is equal to?

Explanation / Answer

1) at 0.10 level and right tailed test ; critical value z =1.2816

2)  standard error =std deviation/(n)1/2 =500/(100)1/2 =50

3) test statistic =(X-mean)/std error =(10000-10124)/50 =-2.48

4) for test statistic is not higher ten critical value ; we can not reject null hypothesis

we do not have evidence that their price is higher

5) p value for above test =0.9934

please reply cause hypothesis is not given hence it is assumed to be right tailed by statement in claim that prices are higher

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