The daily revenue at a university snack bar has been recorded for the past five years. Records indicate that the mean daily revenue is $1500 and the standard deviation is $500. The distribution is skewed to the right due to several high volume days (football game days). Suppose that 100 days are randomly selected and the average daily revenue computed. Which of the following describes the sampling distribution of the sample mean?
A) normally distributed with a mean of $1500 and a standard deviation of $500
B) skewed to the right with a mean of $1500 and a standard deviation of $500
C) normally distributed with a mean of $150 and a standard deviation of $50
D) normally distributed with a mean of $1500 and a standard deviation of $50

Question

Quizplus · Accepted Answer

The Central Limit Theorem states that the sampling distribution of the sample mean will be approximately normally distributed if the sample size is large enough (n=100 is large). The mean of the sampling distribution is the same as the population mean ($1500), and the standard deviation of the sampling distribution (standard error) is the population standard deviation ($500) divided by the square root of the sample size (100), which is $50.

The Daily Revenue at a University Snack Bar Has Been