Answer:
We conclude that null hypothesis must be rejected at 5% level of significance.
Step-by-step explanation:
We are given that Consumers Energy states that the average electric bill across the state is $98.15. We want to test the claim that the average bill amount is actually less than $98.15.
For this we are given with the hypothesis situation as;
NULL HYPOTHESIS, : 98.15
ALTERNATE HYPOTHESIS, : < 98.15
Also, level of significance is given as 5%.
<u><em>Now, we are given with the P-value of the test statistics then our decision rule is given by;</em></u>
- If P-value is less than the significance level, then we will reject our null hypothesis.
- If P-value is more than the significance level, then we will not reject our null hypothesis.
Since, according the question;
P-value = 0.0218 or 2.18%
Level of significance = 5%
Clearly, as we can see that P-value is less than the significance level, so we have sufficient evidence to reject null hypothesis.
Therefore, we conclude that the average bill amount is actually less than $98.15.