A producer of outdoor clothing used a focus group to obtain information about the demand for fleece jackets with built-in battery operated warming panels. At prices of $100, $90, $80, $70, $60, and $50, the focus group demanded 23, 31, 40, 44, 48, and 60 jackets, respectively. Is price statistically significantly different from zero at the 0.05 level of significance? (Hint: Use Excel's LINEST tool or, if you have the Window's version, the regression tool.)

Yes, price is statistically different from zero at 0.05 level of significance

Explanation:

Given Data:

Price         Quantity

$100              23

$90                31

$80                40

$70                44

$60                48

$50                60

These are two variables, price and quantity. The quantity is dependent variable and price is the independent variable.

Finding the regression using excel:

--In excel, click on data analysis tool button in the data tab. Within that, select regression. A box will appear. Here, fill in the following:

1. Input Y range: Cell with demand data

2. Input X range: Cell with price data

3. Select the label button and line fit plot and then click ok.

4. This will give regression result for this data.

Find attached of the regression output

Hypothesis:

H₀ : The price is not statistically different at 0.05 level of significance

HA : The price is statistically different from 0.05 level of significance

From the attached  file, p-value = 0.0002∠0.05

Hence, reject H₀ and conclude that price is statistically different from zero at 0.05 level of significance

the first one $24,630