STC 11. 03-NUMERI.ASMT.docx 03-NUMERI.ASMT, MATH 302, SEC , ID NAME 3.8 Suppose
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Question
STC 11. 03-NUMERI.ASMT.docx 03-NUMERI.ASMT, MATH 302, SEC , ID NAME 3.8 Suppose that you care for the price you spent for grilled fish available at the following two seafood restaurants. On different days, they randomly put different prices for sea foods. Suppose further that the type of fish, quality, taste, location etc are all very similar except price. a. Restaurant 1: average cost for fish 60 Riyals, standard deviation 2. b. Restaurant 2: average cost for fish 55 Riyals, standard deviation 20. Which restaurant would you go? Explain the logic of your choice.Explanation / Answer
Solution:
I will go to restaurant 1 as this is less variability than restaurant 2. We can say that Standard deviation for Restrautant 1 is 2 and restaurent 2 standard deviation is 20.
Fot this we will calculate Coefficient of variation which can be calculated as follows:
CV For restaurant 1 = (2/60)*100% = 3.33%
CV for restaurant 2 = (20/55)*100% = 36.36%
We can say that the restaurent 2 price is much more variable than the restaurent 2.
So i will choose restaurant1 as relative to mean is less variable than the restaurant 1.
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