A marketing research company is estimating the average total compensation of CEOs in the service industry. Data were randomly collected from 18 CEOs and the 97% confidence interval for the mean was calculated to be ($2,181,260, $5,836,180). What would happen to the confidence interval if the confidence level were changed to 95%?
A) The interval would get narrower.
B) The interval would get wider.
C) There would be no change in the width of the interval.
D) It is impossible to tell until the 95% interval is constructed.

Question

Quizplus · Accepted Answer

A lower confidence level results in a narrower confidence interval because there is less certainty required, which reduces the margin of error.

A Marketing Research Company Is Estimating the Average Total Compensation