The type I error and type II error can be described as follows:
Type I error: We can conclude that if the mean exceeds $85000, when in fact it does not. Thus, opening your restaurant in a locale that will not support it).
Type II error: We can conclude that if the mean income does not exceed $85000, when in fact it does. Thus, deciding not to open your restaurant in a locale that will support it.
<h3>What is a Type I and a Type II error?</h3>
A Type I error in statistics is described as rejecting the null hypothesis when it is actually true, and a Type II error is defined as failing to reject the null hypothesis when it is genuinely untrue.
The type I error and type II error can be described as follows:
- Type I error: We can conclude that if the mean exceeds $85000, when in fact it does not.
- Type II error: We can conclude that if the mean income does not exceed $85000, when in fact it does.
The consequences of each error are:
If you launched your business in an inappropriate location, you would incur a financial loss before realizing your error.
If you do not open your restaurant in an ideal location, you will miss out on the potential to make a profit, but you will not necessarily lose money.
Learn more about type I error and type II error here:
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