The manufacturer of an MP3 player wanted to know whether a 10 percent reduction
ID: 3181143 • Letter: T
Question
The manufacturer of an MP3 player wanted to know whether a 10 percent reduction in price is enough to increase the sales of its 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 138 127 88 114 147 122 96
Reduced price 128 133 152 137 116 106 113 114
At the .005 significance level, can the manufacturer conclude that the price reduction resulted in an increase in sales? Hint: For the calculations, assume the "Reduced price" as the first sample.
The pooled variance is . (Round your answer to 2 decimal places.)
The test statistic is . (Round your answer to 2 decimal places.)
Explanation / Answer
H0: mu1=>mu2 , price reduction not increases sale.
H1: mu1< mu2. price reduction increases sale.
Using Minitab,
Two-Sample T-Test and CI: Regular price, Reduced price
Two-sample T for Regular price vs Reduced price
N Mean StDev SE Mean
Regular price 7 118.9 21.3 8.1
Reduced price 8 124.9 15.4 5.4
Difference = (Regular price) - (Reduced price)
Estimate for difference: -6.02
95% CI for difference: (-27.69, 15.65)
T-Test of difference = 0 (vs ): T-Value = -0.62 P-Value = 0.550 DF = 10
Since P_value > 0.05 so we fail to Reject the Null Hypothesis
Sample does not provide enough evidence to support the claim
conclusion: price reduction not increases sale.
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