Question

A producer of outdoor clothing used a focus group to obtain information about the demand for fleece jackets with​ built-in battery operated warming panels. At prices of​ $100, $90,​ $80, $70,​ $60, and​ $50, the focus group demanded​ 23, 31,​ 40, 44,​ 48, and 60​ jackets, respectively. Is price statistically significantly different from zero at the 0.05 level of​ significance? ​(Hint​: Use​ Excel's LINEST tool​ or, if you have the​ Window's version, the regression​ tool.)

Answer 1

Yes, price is statistically different from zero at 0.05 level of significance

Step-by-step explanation:

Given Data:

Price Quantity

$100 23

$90 31

$80 40

$70 44

$60 48

$50 60

These are two variables, price and quantity. The quantity is dependent variable and price is the independent variable.

Finding the regression using excel:

--In excel, click on data analysis tool button in the data tab. Within that, select regression. A box will appear. Here, fill in the following:

1. Input Y range: Cell with demand data

2. Input X range: Cell with price data

3. Select the label button and line fit plot and then click ok.

4. This will give regression result for this data.

Find attached of the regression output

Hypothesis:

H₀ : The price is not statistically different at 0.05 level of significance

HA : The price is statistically different from 0.05 level of significance

From the attached file, p-value = 0.0002∠0.05

Hence, reject H₀ and conclude that price is statistically different from zero at 0.05 level of significance