A company providing mobile phone service plans has a list of phone numbers for their 250,000 customers. The company is considering adding a new service that includes unlimited video streaming, as an add-on to existing data plans. A simple random sample of 324 customers is polled by the store and asked what they would be willing to pay per month to add the new service. The sample average of the responses is $13, and the sample standard deviation is $18. The histogram of the sample data is heavily skewed to the right.
 
 (a) Consider all 250,000 customers. The average of what they’d be willing to pay for the service is estimated as $________; this estimate is likely to be off by about $________ or so. 
 
 
 
 
 
 
 
 
 
 
 (b) Can we use the normal curve to construct confidence intervals for this problem given that the histogram of the data does not look like the normal curve? Explain why.
 
 (c) Find the 98%-confidence interval for the average of what they’d be willing to pay. 
 
 ($________, $________)
 
 
 (d) A company executive suggests that the monthly price of the new service should be set at the lower end of the confidence interval above, since only 2% of customers would NOT be willing to pay this much. Do you agree with this reasoning? 
 
 (circle one) YES or NO, and briefly explain your answer

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.4: Distributions Of Data
Problem 19PFA
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A company providing mobile phone service plans has a list of phone numbers for their 250,000 customers. The company is considering adding a new service that includes unlimited video streaming, as an add-on to existing data plans. A simple random sample of 324 customers is polled by the store and asked what they would be willing to pay per month to add the new service. The sample average of the responses is $13, and the sample standard deviation is $18. The histogram of the sample data is heavily skewed to the right.
 


(a) Consider all 250,000 customers. The average of what they’d be willing to pay for the service is estimated as $________; this estimate is likely to be off by about $________ or so. 
 
 
 
 
 
 
 
 
 
 


(b) Can we use the normal curve to construct confidence intervals for this problem given that the histogram of the data does not look like the normal curve? Explain why.



(c) Find the 98%-confidence interval for the average of what they’d be willing to pay. 


($________, $________)



(d) A company executive suggests that the monthly price of the new service should be set at the lower end of the confidence interval above, since only 2% of customers would NOT be willing to pay this much. Do you agree with this reasoning? 


(circle one) YES or NO, and briefly explain your answer 

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