Here are the essential concepts you must grasp in order to answer the question correctly.
Null Hypothesis
The null hypothesis is a statement that there is no effect or no difference, serving as a default position in statistical testing. In this context, it posits that the standard deviation of starting prices for the vehicles is $2900 or less. Rejecting the null hypothesis suggests that there is sufficient evidence to believe that the standard deviation exceeds this value.
Recommended video:
Statistical Significance
Statistical significance refers to the likelihood that a result or relationship is caused by something other than mere chance. When rejecting the null hypothesis, it indicates that the observed data is unlikely to occur if the null hypothesis were true, often assessed using a p-value. A low p-value (typically less than 0.05) suggests strong evidence against the null hypothesis.
Recommended video:
Parameters vs. Statistics
Standard Deviation
Standard deviation is a measure of the amount of variation or dispersion in a set of values. In this scenario, it quantifies how much the starting prices of the vehicles deviate from the average price. A higher standard deviation indicates greater variability in prices, which is critical for understanding the financial implications for consumers and the organization.
Recommended video:
Calculating Standard Deviation