Question

Recently, a price war has developed among retailers selling Brand X denim jeans. A major chain buyer wishes to estimate the mean price of these jeans during this period to compare it to the normal selling price of $20.00. A random sample of 7 major retailers produces a mean retail price of $13.50 with a standard deviation of $3.50. A 80% confidence interval for the true mean retail price of Brand X jeans during the price war is:



(10.93, 16.07)

(11.60, 15.40)

(8.46, 18.54)

(11.81, 15.19)

(10.00, 17.00)

Answer 1

CI80 = mean ± 1.28(sd/√n)

With your data:

CI80 = 13.50 ± 1.28(3.50/√7)

I'll let you take it from here to choose your answer.

Answer 2

(11.60, 15.40)