A company providing mobile phone service plans has a list of phone numbers for their 125,000 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 256 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 $10, and the sample standard deviation is $8. The histogram of the sample data is heavily skewed to the right. A company executive suggests that the monthly price of the new service should
A company providing mobile phone service plans has a list of phone numbers for
their 125,000 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 256 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 $10, and the sample standard deviation is $8. The histogram of the
sample data is heavily skewed to the right.
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 1% 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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