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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?

Definitions:

Massachusetts Bay Colony

A colonial settlement established by the English Puritans near present-day Boston in 1630.

Virginia Colony

The first permanent English settlement in North America, founded in 1607, serving as a key location for colonial expansion and the development of American society.

Early Days

A term referring to the initial period of existence or operation of an entity, often characterized by simplicity, experimentation, and establishment of foundational principles.

Colonization

The process by which a central power dominates the surrounding land and its indigenous people, often involving the establishment of foreign control over territories for economic or strategic benefits.