An analyst from an energy research institute in California w

An analyst from an energy research institute in California wishes to precisely estimate a 95% confidence interval for the average price of unleaded gasoline in the state. In particular, she does not want the sample mean to deviate from the population mean by more than $0.07. What is the minimum number of gas stations that she should include in her sample if she uses the standard deviation estimate of $0.25, as reported in the popular press?

Solution

n = [( 1.96* 0.25 ) / 0.07 ] ²

n = 49 . Minimum 49 gas stations she should include in her sample.