Carpetland salespersons average $8000 per week in sales. Steve Contois, the firm's vice president, proposes a compensation plan with new selling incentives. Steve hopes that the results of a trial selling period will enable him to conclude that the compensation plan increases the average sales per salesperson.
Develop the appropriate null and alternative hypotheses.
What is the Type I error in this situation? What are the consequences of making this error?
What is the Type II error in this situation? What are the consequences of making this error?