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

question 40

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. At the 5% significance level, does the evidence support the manager's claim?

• A) No, because the test statistic value is less than the critical value.
• B) Yes, because the test statistic value is less than the critical value.
• C) No, because the test statistic value is greater than the critical value.
• D) Yes, because the test statistic value is greater than the critical value.

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Definitions:

Mass Selling

A marketing strategy that targets a large, general audience through widespread advertising and promotional techniques, contrary to personalized selling.

Personal Selling

A direct marketing approach where sales representatives engage with potential customers to sell products or services.

Public Relations

A process of strategic communication aimed at developing beneficial relationships between organizations and their stakeholders.

Feedback Loop

A process in which the outputs of a system are circled back and used as inputs to improve or modify the system's performance.