Question

Companies that sell groceries over the internet are called e-groceries. Customers enter orders, pay by credit card, and receive goods by truck. A potential electronic grocer analyzed the market and determined that to be profitable, the average order would have to exceed $85. To determine if an e-grocery store is profitable in a large city, the service is provided to a random sample of customers, and the size of the orders is recorded. From these data, can we infer that an e-grocery store will be profitable in this city? Sample statistics: (X = 89.27), (s = 17.30), (n = 85), (α = 0.05).

Answer 1

To determine if an e-grocery store will be profitable in a city, we can conduct a hypothesis test using sample statistics. By comparing the test statistic to the critical value at a significance level of α = 0.05, we can make a decision.

Step-by-step explanation:

To determine if an e-grocery store will be profitable in the city, we need to analyze the sample statistics and conduct a hypothesis test. The null hypothesis is that the average order is not greater than $85, and the alternative hypothesis is that the average order is greater than $85.

We calculate the test statistic using the formula: t = (X - μ) / (s / √n), where X is the sample mean, μ is the hypothesized population mean, s is the sample standard deviation, and n is the sample size.

By comparing the test statistic to the critical value from the t-distribution at a significance level of α = 0.05, we can make a decision. If the test statistic is greater than the critical value, we can reject the null hypothesis and conclude that an e-grocery store will be profitable in the city.