Question

In order to determine the average price of hotel rooms in Atlanta, a sample of 64 hotels was selected. It was determined that the average price of the rooms in the sample was $112. The population standard deviation is known to be $16.

a. Which form of the hypotheses should be used to test whether or not the average room price is significantly different from $108.50?

H0:
-mu is greater than or equal to $108.50
mu is greater than $108.50
mu is less than $108.50mu is less than or equal to $108.50
mu is equal to $108.50mu is not equal to $108.50

Ha: -
-mu is greater than or equal to $108.50
mu is greater than $108.50mu is less than $108.50
mu is less than or equal to $108.50
mu is equal to $108.50mu is not equal to $108.50

b. Test to determine if whether or not the average room price is significantly different from $108.50, using an alpha level of .05.


Reject H0
or
Fail to reject H0

Answer 1

Explanation:

H0: mu is equal to $108.50

Ha: mu is not equal to $108.50

This test is a two tailed test and using the z tat formula, we can ascertain if there is a difference.

z = x-u / sd/√n

Where x is $112, u is $108.50 sd is $16 and n is 64

z = 112-108.50 / 16/√64

z = 3.5/(16/8)

z = 3.5/2

z = 1.75

To help us arrive at a conclusion, we need to find the p value using alpha id = 0.05. The p value is 0.08. Since the p value is great than 0.05, we fail to reject the null and conclude that there is not enough statistical evidence to prove that the average room price is significantly different from $108.50