Suppose a random sample of 40 online retailers is selected to estimate the average price of a particular item.The average price in the sample is $1.38.Build a 99% confidence interval estimate of the average price of the item for the population of online retailers represented here.Assume the standard deviation of prices for the population of retailers who sell the item is known to be $.22.Report the upper bound for your interval.
A)$1.98
B)$2.35
C)$2.17
D)$1.69
E)$1.47

Question

Quizplus · Accepted Answer

The upper bound of the 99% confidence interval is calculated using the formula: sample mean + (Z-score * (population standard deviation / sqrt(sample size))). For a 99% confidence level, the Z-score is approximately 2.576. Thus, the upper bound is $1.38 + (2.576 * (0.22 / sqrt(40))) = $1.47.

Suppose a Random Sample of 40 Online Retailers Is Selected