1) ABC company, a seller of high-end consumer electronics, is developing a new cellphone that will sell for $2000. The cellphone will have a very small potential market of only 3000 customers. ABC wants to estimate the sample size they will need to be within plus or minus .20 of the average customer rating (1 – 7 scale; 1 = Very unlikely to purchase; 7 = Very likely to purchase). ABC is unsure of the amount of variability. They want a 95% level of confidence. What is the sample size necessary?
Accepted Solution
A:
Answer:sample size require is 1.4Step-by-step explanation:Given data:Selling price $2000Rating ( range) for purchaing 7standard deviation is given as[tex]=\frac{ range -1}{6}[/tex] [tex] = \frac{7-1}{6} = 1[/tex][tex]\sigma = 1[/tex]for 95% confidencwe interval z value is 1.96margin of error is given as E [tex]E = Z \times \frac{\sigma}{\sqrt{n}}[/tex]putting all value to get the margin of error value [tex]E = 1.96 \times \frac{1}{\sqrt{1.4}}[/tex]E = 1.65Sample size is given as [tex]n = [\frac{2\times \sigma}{E}]^2[/tex][tex]n = [\frac{1.96 \times 1}{1.65}]^2[/tex]n = 1.4