Potential Patrons Willingness to Pay Price for the Entrees - Assignment Example

Q1a Note: Potential patrons are all those people who indicated that they usually eat in this type of restaurant at least once every two weeks Potential patrons willingness to pay price for the entrées Mean $18.8353 Median $16.0000 Mode $16.00 Minimum $6.00 Maximum $60.00 Q1b The one sample t-test is usually carried out on normally distributed interval variables. A one sample t-test is used to test whether a sample mean of a normally distributed continuous variable is significantly different from the hypothesized value. In this case, we wish to determine if the average willingness to pay price for an à la carte entrée significantly differs from $18. The null hypothesis will therefore be H0=$18 while the alternative hypothesis will be H1≠$18. The figures below show that the mean price of the evening meal entree for this study was found to be $ 18.84 and the p-value was 0.118 at 339 degrees of freedom. Since p-value >0.005 then the null hypothesis is not rejected. This shows that the sample was drawn from a population such that the mean price that the people are willing to purchase an à la carte entrée was $18. The 95% confidence interval of the difference shows a range of $-.2131 to $ 1.8837which is inclusive of zero hence providing evidence that the null hypothesis should not be rejected. Therefore the $18 amount from the forecasting model was correct . One-Sample Statistics N Mean Std. Deviation Std. Error Mean What would you expect an average evening meal entree item alone to be priced? 340 $18.8353 $9.82784 $.53299 One-Sample Test Test Value = 18 t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference Lower Upper What would you expect an average evening meal entree item alone to be priced? 1.567 339 .118 $.83529 $-.2131 $1.8837 Q2 Can Michael expect all patrons to spend an average of $200 a month on food? The one sample t-test is usually based on the assumption that the variables are normally distributed. It tests whether a sample mean of a normally distributed continuous variable is significantly different from the hypothesized value. In this case, we wish to determine if total dollars spent per month in restaurants by an individual significantly differs from $200. The null hypothesis will therefore be H0=$200 while the alternative hypothesis will be H1≠$200. The figures below show that the total dollars spent per month in restaurants by an individual were $ 150.05 and the p-value was 0.000 at 339 degrees of freedom. Since p-value Read More