The average gasoline price of one of the major oil companies has been $1.25 per gallon. Recently the company has under taken several efficiency measures in order to reduce prices. Management is interested in determining whether their efficiency measures has been have actually reduced prices. That is, they are interested in deterring whether or not the current average price is significantly less than $1.25. A random sample of 49of their gas station is selected and the average price is determined to be $1.20. Assume that the population standard deviation (Ó) is $0.14.
(a) At a 95% confidence, test to determine wether the measures were effective in reducing the average prices
(b) Compute the p-value associated with the above sample results, and explain what conclusion can be drawn bases on the p-value?