# The average cost per square foot for office rental space in the central business district of Philadelphia

## Question:

The average cost per square foot for office rental space in the central business district of Philadelphia is $23.58, according to Cushman & Wakefield. A large real estate company wants to confirm this figure. The firm conducts a telephone survey of 95 offices in the central business district of Philadelphia and asks the office managers how much they pay in rent per square foot. Suppose the sample average is $22.83 per square foot. The population standard deviation is $5.11.

a. Conduct a hypothesis test using α = .05to determine whether the cost per square foot reported by Cushman & Wakefield should be rejected.

b. If the decision in part (a) is to fail to reject and if the actual average cost per square foot is $22.30, what is the probability of committing a Type II error?

## Step by Step Answer:

**Related Book For**

## Business Statistics for Contemporary Decision Making

**ISBN:** 978-0470910184

6th Edition

**Authors:** Ken Black