Sampled Outlets

The manufacturer of an MP3 player wanted to know whether a 10 percent reduction in price is enough to increase the sales of the product. To investigate, the owner randomly selected eight outlets and sold the MP3 player at the reduced price. At seven randomly selected outlets, the MP3 player was sold at the regular price. Reported below is the number of units sold last month at the sampled outlets.

Regular Price Reduced Price
138  128
121  134
88  152
115  135
141  114
125  106
96  112

a. At the .01 level of significance, can the manufacturer conclude that the price reduction resulted in an increase in sales? Assume that the populations are approximately normally distributed.

Complete the following:
1. State H0.
2. State H1.
3. State the value of α.
4. State the value of the test statistic.
5. State the p-value.
6. State the decision in terms of H0 and why.
7. State the decision in terms of the problem.

b. Construct separate 99% confidence interval estimates of the mean number of sales at regular price and at the reduced price.

c. Do the results of part (b) agree with the results of part (a)? Explain why or why not.

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