On a given day, the price of a gallon of milk had a mean price of $2.03 with a standard deviation of $0.07. A particular food store sold milk for $1.96/gallon. Interpret the z-score for this gas station.
A)The milk price of this food store falls 1 standard deviation below the milk gas price of all food stores.
B)The milk price of this food store falls 7 standard deviations below the mean milk price of all food stores.
C)The milk price of this food store falls 7 standard deviations above the mean milk price of all food stores.
D)The milk price of this food store falls 1 standard deviation above the mean milk price of all food stores.

Question

Quizplus · Accepted Answer

The z-score is calculated by subtracting the mean from the observed value and dividing by the standard deviation. Here, $ z = \frac{1.96 - 2.03}{0.07} = -1 $, indicating the price at this food store is 1 standard deviation below the mean.

On a Given Day, the Price of a Gallon of Milk