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

137

122

88

114

143

122

96

  Reduced price

126

135

152

134

114

109

112

114

At the .050 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.

Solution

H0: mu1=>mu2 , price reduction not increases sale.

H1: mu1< mu2. price reduction increases sale.

x-bar1= 117.43

n1=7

s1=20.07

x-bar2= 124.5

n2=8

s2=15

Pooled variance = (s1^2/n1 +s2^2/n2)

= ((20.07)^2/7 + (15)^2/8)

= 85.67 Answer

Test static = (x-bar1- x-bar2)/sqrt(s1^2/n1 +s2^2/n2)

= (117.43 -124.5 )/sqrt(85.67)

= - 0.76 Answer

Claim: µ1< µ2

Test Statistic , t = -0.76

DF = 8+7 -2 = 13

P-Value: 0.23

Fail to Reject the Null Hypothesis
Sample does not provide enough evidence to support the claim

Conclusion: price reduction not increases sale.