A Restaurant Chain Has Two Locations in a Medium-Sized Town

question 127

Multiple Choice

A restaurant chain has two locations in a medium-sized town and, believing that it has oversaturated the market for its food, is considering closing one of the restaurants. The manager of the restaurant with a downtown location claims that his restaurant generates more revenue than the sister restaurant by the freeway. The CEO of this company, wishing to test this claim, randomly selects 36 monthly revenue totals for each restaurant. The revenue data from the downtown restaurant have a mean of $360,000 and a standard deviation of $50,000, while the data from the restaurant by the freeway have a mean of $340,000 and a standard deviation of $40,000. Assume there is no reason to believe the population standard deviations are equal, and let μ₁ and μ₂ denote the mean monthly revenue of the downtown restaurant and the restaurant by the freeway, respectively. Which of the following is the appropriate critical value(s) to test the manager's claim at the 5% significance level?

• A) 1.645
• B) 1.668
• C) 1.960
• D) 1.997

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Definitions:

Performance

Performance refers to the act of carrying out or accomplishing an action, task, or function.

Negotiation Stage

A phase in the negotiation process where parties discuss, propose, and approach mutual agreement.

Interests

Specific topics or activities that capture an individual's attention, curiosity, or concern, often leading to engagement or investment in those areas.

Implementation

The process of putting a decision or plan into effect; execution.