The average gasoline price of one of the major oil companies has been
$3.20 per gallon. Because of cost reduction measures, it is believed that there has
been a significant reduction in the average price. In order to test this belief, we
randomly selected a sample of 36 of the company’s gas stations and determined
that the average price for the stations in the sample was $3.14. Assume that the
standard deviation of the population (σ) is $0.12.
a. State the null and the alternative hypotheses.
b. Compute the test statistic.
c. At 95% confidence, test the company’s claim.
Not sure exactly how to calculate. Help would be appreciated. Thank you.