Question

QUESTION 3 Toyota provides an option of a sunroof and side airbag package for its Corolla model. This package costs $1400. Assume that prior to offering this option package, Toyota wants to determine the percentage of Corolla buyers who would pay $1400 extra for the sunroof and side airbags. How many Corolla buyers must be surveyed if we want to be 95% confident that the sample percentage is within four percentage points of the true percent all Corolla buyers

Answer 1

n=601

Explanation:

Formula used:

`n=z((\alpha )/(2))^2(p(1-p) )/(E^2)`

Solution:

`n=z((\alpha )/(2))^2(p(1-p) )/(E^2)`

Where,

`(\alpha )/(2)=0.025`

As there is no previous estimate for p

Then, p=0.5

Here on using the table

`z((\alpha )/(2)) =1.959963985`

Also,

E=0.04

p=0.5

Thus,

n=600.2279407

On approximating the value,

n=601