The manufacturer of an MP3 player wanted to know whether a 10%reduction in price is enough to increase the sales of its product.To investigate, the owner randomly selected eight outlets and soldthe MP3 player at the reduced price. At seven randomly selectedoutlets, the MP3 player was sold at the regular price. Reportedbelow is the number of units sold last month at the regular andreduced prices at the randomly selected outlets.
| | | | | | | | |
| Regular price | 133 | 125 | 88 | 118 | 120 | 121 | 95 | |
| Reduced price | 121 | 132 | 154 | 133 | 115 | 123 | 133 | 133 |
|
At the 0.050 significance level, can the manufacturer concludethat the price reduction resulted in an increase in sales?Hint: For the calculations, assume reduced price as thefirst sample.
1. Compute the pooled estimate of the variance.
2. Compute the test statistic.
3. State your decision about the null hypothesis.
