An electronics retailer would like to investigate the relationship between the selling price of a di

Roland Waters

Roland Waters

Answered question

2022-06-20

An electronics retailer would like to investigate the relationship between the selling price of a digital camera and the demand for it. The table shown below gives the weekly demand for the camera in one particular market along with the corresponding price. These data have a sample correlation​ coefficient, rounded to three decimal​ places, of negative 0.888. Using alpha equals 0.10​, test if the population correlation coefficient between the selling price and the demand for the camera is less than zero.
Demand Price 17 300 20 310 15 320 11 330 9 340
What is the​ p-value?

Answer & Explanation

frethi38

frethi38

Beginner2022-06-21Added 16 answers

Given Data
Pearson correlation coefficient (r) = -0.888
Sample size (n) =5
Formulation of Hypothesis
Null Hypothesis:- population correlation coefficient between the selling price and the demand for the camera is zero
H 0 : ρ = 0
Alternative Hypothesis :- population correlation coefficient between the selling price and the demand for the camera is less than zero
H α : ρ < 0
To test the significance, test statistic is given by
t = r n 2 1 r 2 = 0.888 × 5 2 1 ( 0.888 ) 2 = 3.345
p-value
d.o.f=3
Answer
p-value=0.022

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