Question
Insurance Company A claims that its customers pay less for car insurance, on average, than customers of its competitor, Company B. You wonder if this
Insurance Company A claims that its customers pay less for car insurance, on average, than customers of its competitor, Company B. You wonder if this is true, so you decide to compare the average monthly costs of similar insurance policies from the two companies. For a random sample of 12people who buy insurance from Company A, the mean cost is $152 per month with a standard deviation of $16. For 11 randomly selected customers of Company B, you find that they pay a mean of $160 per month with a standard deviation of $10. Assume that both populations are approximately normal and that the population variances are equal to test Company A's claim at the 0.10 level of significance. Let customers of Company A be Population1 and letcustomers of Company B be Population2.
Step3of3:
Draw a conclusion and interpret the decision.
A.) We reject the null hypothesis and conclude that there is sufficient evidence at a 0.10 level of significance to support the claim that customers of Company A pay less for car insurance, on average, than customers of Company B.
B.) We fail to reject the null hypothesis and conclude that there is sufficient evidence at a 0.10 level of significanceto support the claimthat customers of Company A pay less for car insurance, on average, than customers of Company B.
C.) We fail to reject the null hypothesis and conclude that there is insufficient evidence at a 0.10 level of significanceto support the claim that customers of Company A pay less for car insurance, on average, than customers of Company B.
D.) We reject the null hypothesis and conclude that there is insufficient evidence at a 0.10 level of significance to support the claim that customers of Company A pay less for car insurance, on average, than customers of Company B.
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