Question

if the average selling price of flashlights is $5.50 with a standard deviation of $1.50, and a store wants to price these in the lower 20% of the flashlight prices, what should the selling price be ?

Answer 1

To price the flashlights in the lower 20% of the flashlight prices, the selling price should be approximately $4.86.

Step-by-step explanation:

To price the flashlights in the lower 20% of the flashlight prices, we can use the inverse normal distribution to find the corresponding z-score. The z-score represents how many standard deviations below the mean a particular value is.

First, let's find the z-score corresponding to the lower 20% of the distribution. We can use a z-table or a calculator to find this value. The z-score that corresponds to the lower 20% is approximately -0.84.

Next, we can convert this z-score back into a selling price using the formula: x = z * standard deviation + mean. Plugging in the values, we get x = -0.84 * $1.50 + $5.50, which gives us a selling price of approximately $4.86.