Question

The Nutella questionnaire asked about customer willingness to pay. As part of the data analysis, the researchers test whether the average willingness to pay is different from $5. The test results in an observed t value of 10.8462 with 387 degrees of freedom, a p-value of 0.012, and a mean difference of 0.678. The assumed significance level is 0.05.

Summarize these findings as you would for a final report, making sure to provide an interpretation that will be meaningful to management. Finally, provide a recommendation.

Answer 1

Given that, null, Ho: u=5 alternate, average willingness to pay is different from $5, H1: #5 level of significance, alpha = 0.05 from standard normal table, two tailed z alpha/2 =1.96 since our test is two-tailed reject Ho, if to < -1.966 OR if to > 1.966 we use test statistic (z) = x-u/(s.d/sqrt(n)) to = 10.8462 critical value the value of lz alpha at los 5% is 1.96 we got toſ = 10.8462 & 1 z alpha | = 1.96 make decision hence value of to> z alpha and here we reject Ho p-value: two tailed ( double the one tail) - ha : (p # 10.8462) = 0.012 hence value of po.05 > 0.012, here we reject Ho conclusion: since, p0.05 > 0.012, reject Ho, i.e the average willingness to pay is different from $5