Product A is sold across the country. The average price of Product A has been? $

Question

Product A is sold across the country. The average price of Product A has been? $1 per unit. Due to cost reduction? measures, it is believed that there has been a decrease in the average price per unit. In order to test this? belief, a sample of 36 is taken. It is determined that the average price of Product A is? $0.90. Assume that the population standard deviation is? $0.12. What is correct set of? hypotheses? A. ?Ho: muless than 1 ? Ha: mu greater than or equals 1 B. ?Ho: mugreater than or equals 1 ? Ha: mu ?< 1 C. ?Ho: mu?= 1 ? Ha: mu ?< 1 D. ? Ho: muless than or equals 1 ? Ha: mu ?> 1 What is the z test? statistic? What do you? conclude? A. ?Z= -1.45; do not reject Ho. B. Z? = 1.645; reject Ho. C. ?Z= 1.96; do not reject Ho. D. Z? = -5; reject Ho.

Explanation / Answer

X?= 0.9

n= 36

sigma= 0.12

H0: u= 1

H1: u< 1 left tail test

alpha= 0.05

Test Statistics

Z= (X?-u)*sqrt(n)/s

=(0.9-1)*sqrt(36)/0.12

=-5

P-value=P(Z<-5)= 2.86652E-07

rounded p-value= 0

Decision making

P-value <Alpha ......... reject H0

answers can be

C. ?Ho: mu?= 1 ? Ha: mu ?< 1

D. Z? = -5; reject Ho.

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