Make Conclusions Based on Confidence Intervals

question 8

Multiple Choice

Make conclusions based on confidence intervals.
-A company that sells eco-friendly cleaning products is concerned that only 19.5% of
People who use such products select their brand. A marketing director suggests that the
Company invest in new advertising and labeling to strengthen its green image. The
Company decides to do so in a test market so that the effectiveness of the marketing
Campaign may be evaluated. Based on data collected in the test market, the company
Constructed a 98% confidence interval for the proportion of all consumers who might buy
Their brand. The resulting interval is 16% to 28%. What conclusion should the
Company reach about the new marketing campaign?

• A) The data do not provide convincing evidence that the marketing campaign increases the percentage of customers for the company's products.
• B) The data do provide convincing evidence that the marketing campaign increases the percentage of customers for the company's products.
• C) The new marketing campaign is effective in increasing the percentage of customers buying their brand.
• D) The company should launch the new marketing campaign.
• E) None of the above.

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Definitions:

Arc Elasticity

A method for calculating elasticity between two points on a demand curve using the midpoint formula.

Wheat Demand

The total quantity of wheat that consumers are willing and able to purchase at a given price level.

Price Elasticity of Demand

A measure of the responsiveness of the quantity demanded of a good to a change in its price.

Bushel of Wheat

A unit of measure for volumes of dry commodities, typically used in agriculture for wheat, equivalent to approximately 35.24 liters.