A pizza chain is considering opening a new store in an area that currently does not have any such stores.The chain will open if there is evidence that more than 5,000 of the20,000 households in the area have a favorable view of its brand.It conducts a telephone poll of 300 randomly selected households in the area and finds that 96 have a favorable view.The decision on the hypothesis test using a 5% level of significance is:
A)to reject H0 in favor of H1.
B)to accept H0 in favor of H1.
C)to fail to reject H0 in favor of H1.
D)we cannot tell what the decision should be from the information given.

Question

Quizplus · Accepted Answer

The sample proportion is 96/300 = 0.32. The null hypothesis is that the true proportion is 5,000/20,000 = 0.25. Using a significance level of 5%, a hypothesis test (such as a z-test for proportions) would show that 0.32 is significantly greater than 0.25, leading to rejection of the null hypothesis.

A Pizza Chain Is Considering Opening a New Store in an Area