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Raftelis Financial Consulting reported that the mean quarterly water bill in the United States is $47.50 (U.S. News && World Report, August 12, 2002). Some water systems are operated by public utilities, whereas other water systems are operated by private companies. An economist pointed out that privatization does not equal competition and that monopoly powers provided to public utilities are now being transferred to private companies. The concern is that consumers end up paying higher-than-average rates for water provided by private companies. The water system for Atlanta, Georgia, is provided by a private company. A sample of 64 Atlanta consumers showed a mean quarterly water bill of $51 with a sample standard deviation of $12. At α = .05, does the Atlanta sample support the conclusion that above-average rates exist for this private water system?
a. State your hypotheses.
H0: µ =
Ha: µ >
b. What is the t statistic (to 2 decimals)?
c. The p-value is
d. Can you conclude that above-average rates exist for this private water system?
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