The average gasoline price of one of the major oil companies in Europe has been $1.25 per liter. Recently, the company has undertaken severa
The average gasoline price of one of the major oil companies in Europe has been $1.25 per liter. Recently, the company has undertaken several efficiency measures in order to reduce prices. Management is interested in determining whether their efficiency measures have actually reduced prices. A random sample of 49 of their gas stations is selected and the average price is determined to be $1.20 per liter. Furthermore, assume that the standard deviation of the population is $0.14.
a) Compute the standard error
b) Compute the test statistic
c) What is the p-value?
d) Develop appropriate hypothesis such as the reject of the null will support the contention that management efficiency measures had reduce gas prices in Europe.
e) At α = 0.05, what is your conclusion? Use critical value approach
f) Repeat the preceding hypothesis test using the p-value approach.