Question

Model Price ($) Model Price ($) Retail Outlet Deluxe Standard Retail Outlet Deluxe Standard 1 39 27 5 40 30 2 39 29 6 39 35 3 46 35 7 35 29 4 38 31 The manufacturer's suggested retail prices for the two models show a $10 price differential. Use a .05 level of significance and test that the mean difference between the prices of the two models is $10.

Answer 1

To test the claim that the mean difference between the prices of the two models is $10, we can use a t-test for dependent samples.

Step-by-step explanation:

To test the claim that the mean difference between the prices of the two models is $10, we can use a t-test for dependent samples.

1. The null hypothesis (H0) is that the mean difference is equal to $10, while the alternative hypothesis (Ha) is that the mean difference is not equal to $10.
2. We calculate the sample mean difference and the standard deviation of the differences.
3. We calculate the t-statistic using the formula: t = (sample mean difference - hypothesized mean difference) / (standard deviation of the differences / sqrt(n)), where n is the number of pairs of observations.
4. We compare the t-statistic to the critical value from the t-distribution with n-1 degrees of freedom at a significance level of 0.05.
5. If the absolute value of the t-statistic is greater than the critical value, we reject the null hypothesis and conclude that the mean difference is not equal to $10. Otherwise, we fail to reject the null hypothesis and conclude that there is not enough evidence to support the claim that the mean difference is not equal to $10.