Statistics Need help Please

Question

Hoping to lure more shoppers downtown, a new public parking garage has been constructed in Orlando’s central business district. The city plans to pay for the structure through parking fees. For a random sample of 45 weekdays, daily fees collected averaged $527, with a standard deviation of $35.

(a) Explain the 90% confidence interval for mean daily revenue in this parking garage.

(b) The city has forecasted daily revenue to be $550, and will introduce some promotions to increase revenue if they are not collecting that amount on average. Regardless of the answer you found in (a), the park administrator decides there is no need to do the promotion. What is the implication of this decision?

Answer 1

To find the 90% confidence interval you can use the TInterval function on your graphing calculator. Use the TInterval instead of the ZInterval function because you know the sample standard deviation and not the population standard deviation. The confidence interval output should be (518.23,535.77). This means that we are 90% confident that the true mean for parking revenue is in the interval $518.23 to $535.77 per day.

Alternatively, we could say that 90% of samples of size 45 will produce a confidence interval which contains the true mean parking revenue.

Based on the confidence interval the city's projection is too high to begin with. The park manager may have decided not to do the promotion because they realized that they need to adjust their expectations first.