Question

Suppose the board of directors for Cosmic Coffee wants to know the price range for the lowest 40% of drink sales. Find the z-score associated with the upper boundary of of this price range.

Answer 1

Answer:

The z-score associated with the upper boundary of of this price range is -0.25.

Step-by-step explanation:

It is provided that the board of directors for Cosmic Coffee wants to know the price range for the lowest 40% of drink sales.

If X represents the price range of drink sales, then

P (X < x) = 0.40

Consider that X follows a Normal distribution.

To compute the probability of a normally distributed random variable we need to first convert the raw score to the z-scores.

The formula to z-score is:

$z=\frac{X-\mu}{\sigma}$

Then,

P (X < x) = 0.40

⇒ P (Z < z) = 0.40

The value of z for this probability is:

z = -0.25

*Use a z-table.

Thus, the z-score associated with the upper boundary of of this price range is -0.25.