One of your employees has suggested that your company develop a new product. You

Question

One of your employees has suggested that your company develop a new product. You decide to take a random sample of your customers and ask whether or not there is interest in the new product. The response is on a 1 to 5 scale with 1 indicating "definitely would not purchase"; 2, "probably would not purchase"; 3, "not sure"; 4, "probably would purchase"; and 5, "definitely would purchase." For an initial analysis, you will record the responses 1, 2, and 3 as "No" and 4 and 5 as "Yes."

Suppose that after reviewing the results of a previous survey, you proceeded with preliminary development of the product. Now you are at the stage where you need to decide whether or not to make a major investment to produce and market it. You will use another random sample of your customers, but now you want the margin of error to be smaller. What sample size would you use if you wanted the 95% margin of error to be 0.023 or less? (Round your answer up to the nearest whole number.)

__________ Participants

Explanation / Answer

Using the formula:

Margin of error, ME = zc*SE

Here, zc = 1.96

SE = Standard error = S/n0.5, where

S = Standard deviation

n = sample size

Putting values:

0.023 = 1.96*S/n0.5.

Since you have not provided the sample standard deviation value 'S', it is not possible to calculate 'n'.

All that can be told from this info is that in order for the margin of error to smaller than before, the sample size has to be larger than before.

Hope this helps !

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