Chat with us, powered by LiveChat You have just opened a restaurant in a large city, and you are deciding what you should charge for a regular-sized soda. You'd like to charge a price equal to the average of your c - EssayAbode

22 Jan You have just opened a restaurant in a large city, and you are deciding what you should charge for a regular-sized soda. You’d like to charge a price equal to the average of your c

Posted at 02:55h in Business & Finance by

 Activity I – You have just opened a restaurant in a large city, and you are deciding what you should charge for a regular-sized soda. You'd like to charge a price equal to the average of your competitors, which you believe is $2.58. To inform your decision, you want to learn more about the average price charged by competing restaurants in the area. You know you won't be able to get prices for every restaurant, so you randomly sample 35 and collect their soda prices. These data are in Soda.xlsx ( See the attached)

  1. You are assuming the mean soda price is $2.58 for all of your competitors. When conducting data analysis to test this belief, what is this assumption called?
  2. Calculate the t-statistic assuming the mean soda price for all of your competitors is $2.58.
  3. Calculate the p-value for your t-statistic.
  4. Using a confidence level of 90%, test whether the mean soda price of all your competitors is $2.58 using the t-stat.
  5. Using a confidence level of 90%, test whether the mean soda price of all your competitors is $2.58 using the p-value.
  6. Is it possible that your answers to parts d and e would yield different conclusions?

Activity II – To better assess your willingness-to-pay for advertising on others’ websites, you want to learn the mean profit per visit for all visits to your website. To accomplish this, you have collected a random sample of 4,738 visits to your website over the past six months. This sample includes information on visit duration and profits. The data are contained in WebProfits.xlsx (See the attached). Using the data in WebProfits.xlsx:

  1. Build a 99% confidence interval for the mean profit per visit for all of your visitors.
  2. Let the null hypothesis be that mean profit per visit for all of your visitors is $11.50.
  3. Calculate the corresponding t-stat for this null hypothesis.
  4. Calculate the corresponding p-value for this null hypothesis.
  5. With strength of 95%, decide whether or not to reject this null hypothesis.
  6. Detail the reasoning behind your decision.

Sheet1

Restaurant Soda Price
1 $2.39
2 $3.37
3 $2.63
4 $2.80
5 $3.06
6 $2.37
7 $2.37
8 $3.52
9 $2.73
10 $2.66
11 $3.04
12 $2.82
13 $3.10
14 $1.98
15 $3.57
16 $2.98
17 $3.53
18 $3.43
19 $2.94
20 $3.61
21 $2.56
22 $3.64
23 $3.37
24 $2.59
25 $3.66
26 $2.90
27 $2.67
28 $3.16
29 $3.12
30 $3.19
31 $2.58
32 $3.10
33 $2.75
34 $2.88
35 $3.75

Sheet2

Sheet3

,

Sheet1

Visitor Duration Profit
1 2 1
2 7 16
3 5 1
4 8 1
5 16 1
6 8 1
7 9 1
8 6 1
9 5 1
10 28 1
11 3 1
12 5 19
13 12 1
14 10 17
15 10 1
16 15 1
17 21 1
18 10 47
19 20 22
20 4 1
21 10 16
22 9 1
23 6 23
24 8 1
25 6 1
26 8 18
27 5 1
28 2 1
29 14 29
30 10 1
31 7 1
32 12 1
33 3 1
34 7 22
35 9 1
36 4 10
37 5 28
38 12 1
39 11 22
40 5 1
41 5 1
42 10 1
43 21 1
44 7 1
45 5 1
46 6 19
47 7 1
48 4 22
49 4 34
50 11 1
51 8 1
52 6 36
53 12 1
54 8 1
55 5 1
56 11 1
57 13 1
58 7 1
59 5 1
60 6 1
61 11 1
62 8 26
63 3 1
64 12 33
65 11 1
66 23 13
67 6 1
68 9 30
69 12 17
70 5 1
71 8 31
72 4 18
73 6 1
74 8 12
75 4 28
76 15 21
77 11 1
78 4 1
79 5 1
80 8 1
81 6 22
82 4 25
83 11 24
84 8 22
85 5 26
86 7 1
87 5 1
88 11 22
89 9 41
90 10 1
91 9 1
92 9 1
93 11 1
94 1 1
95 9 1
96 7 1
97 5 25
98 9 1
99 7 11
100 16 1
101 6 17
102 5 17
103 11 1
104 3 1
105 6 1
106 4 1
107 6 24
108 7 1
109 14 18
110 6 1
111 5 1
112 10 1
113 6 1
114 8 1
115 8 17
116 17 1
117 9 1
118 10 1
119 5 1
120 9 1
121 4 26
122 7 1
123 10 24
124 14 26
125 12 34
126 3 14
127 9 1
128 10 1
129 10 20
130 4 1
131 4 1
132 6 1
133 15 34
134 5 1
135 5 28
136 15 1
137 10 15
138 6 24
139 6 1
140 8 1
141 12 25
142 11 1
143 4 1
144 6 1
145 5 26
146 10 22
147 6 1
148 10 1
149 6 1
150 2 1
151 10 18
152 7 1
153 10 13
154 11 1
155 12 28
156 8 1
157 15 1
158 8 1
159 3 1
160 9 1
161 5 32
162 17 29
163 6 1
164 9 21
165 12 1
166 12 1
167 5 1
168 8 1
169 8 34
170<

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