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

question 88

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 hypotheses should be used to test the manager's claim?

• A) H₀: µ₁ - µ₂ ≤ 0, H_A: µ₁ - µ₂ > 0
• B) H₀: µ₁ - µ₂ ≥ 0, H_A: µ₁ - µ₂ < 0
• C) H₀: µ₁ - µ₂ = 0, H_A: µ₁ - µ₂ ≠ 0
• D) H₀: µ₁ - µ₂ > 0, H_A: µ₁ - µ₂ ≤ 0

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Definitions:

Entire Population

All members of a specified group without exception, commonly referred to in studies, surveys, and statistical analyses.

External Agencies

Organizations or firms outside of a company that are utilized to perform tasks or services that are not handled in-house, often including advertising, marketing, or public relations efforts.

Formal Invitation

An official or ceremonial request for someone's presence at an event, typically conveyed through a written or printed card.

Informational Report

A factual document aimed at informing the reader about a specific topic, without persuasion.