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Identifying the critical sample Mean value – Sampling distribution


  • To reach a final decision, Christos has to make a general inference (about the population) from the sample data
  • Criterion: Mean income across all households in the market area under consideration
    • If the mean population household income is greater than $19,000, then Christos should introduce the product line into the new market
  • Christos’s decision making is equivalent to either accepting or rejecting the hypothesis:
    • The population mean household income in the new market area is greater than $19,000
  • The term one-tailed signifies that all z-values that would cause Christos to reject H0, are in just one tail of the sampling distribution
    • µ -> Population Mean
    • H0: µ $19,000
    • Ha: µ > $19,000

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