On a given day, the price of a gallon of milk had a mean price of $2.30 with a standard deviation of $0.05. A particular food store sold milk for $2.25/gallon. Interpret the z-score for this gas station.
A) The milk price of this food store falls 1 standard deviation below the milk gas price of all food stores.
B) The milk price of this food store falls 1 standard deviation above the mean milk price of all food stores.
C) The milk price of this food store falls 5 standard deviations below the mean milk price of all food stores.
D) The milk price of this food store falls 5 standard deviations above the mean milk price of all food stores.

Question

Quizplus · Accepted Answer

The z-score for the food store is (2.25 - 2.30) / 0.05 = -1. This means that the milk price of this food store falls 1 standard deviation below the mean milk price of all food stores.

On a Given Day, the Price of a Gallon of Milk