Concerned that the true average is higher


An engineering firm is evaluating their b ack charges. they originally believed their average back charge was $1800. they are concerned that the true average is higher, which could hurt their quarterly earnings. They randomly select 40 customers, and calculate the corresponding sample mean back charge to be $1950. If the standard deviation of back charges is $500, and alpha =0.05, should the engineering firm be concerned? Perform an appropriate hypothesis test, showing the necessary calculations and or explaining the process used to obtain the results.

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Basic Statistics: Concerned that the true average is higher
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