The manufacturer of an MP3 player wanted to know whether a 1

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

134

126

88

119

143

127

96

  Reduced price

122

137

152

136

117

107

112

111

At the .010 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.

Regular price	134	126	88	119	143	127	96
Reduced price	122	137	152	136	117	107	112	111

Solution

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.

At the .010 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.

Pooled-Variance t Test for the Difference Between Two Means

(assumes equal population variances)

Data

Hypothesized Difference

0

Level of Significance

0.01

Population 1 Sample

Sample Size

8

Sample Mean

124.25

Sample Standard Deviation

15.81816316

Population 2 Sample

Sample Size

7

Sample Mean

119

Sample Standard Deviation

20.01665973

Intermediate Calculations

Population 1 Sample Degrees of Freedom

7

Population 2 Sample Degrees of Freedom

6

Total Degrees of Freedom

13

Pooled Variance

319.6538

Standard Error

9.2532

Difference in Sample Means

5.2500

t Test Statistic

0.5674

The pooled variance is . (Round your answer to 2 decimal places. =319.65

The test statistic is = 0.5674

Upper-Tail Test

Upper Critical Value

2.6503

Calculated t=0.5674 < table value .

Null hypothesis is not rejected.

There is insufficient information in the data for the manufacturer to conclude that the price reduction resulted in an increase in sales.

Pooled-Variance t Test for the Difference Between Two Means
(assumes equal population variances)
Data
Hypothesized Difference	0
Level of Significance	0.01
Population 1 Sample
Sample Size	8
Sample Mean	124.25
Sample Standard Deviation	15.81816316
Population 2 Sample
Sample Size	7
Sample Mean	119
Sample Standard Deviation	20.01665973
Intermediate Calculations
Population 1 Sample Degrees of Freedom	7
Population 2 Sample Degrees of Freedom	6
Total Degrees of Freedom	13
Pooled Variance	319.6538
Standard Error	9.2532
Difference in Sample Means	5.2500
t Test Statistic	0.5674