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 the 20,000 households in the area have a favorable view of its brain.It conducts a telephone poll of 300 randomly selected households in the area and finds that 96 have a favorable view.The pizza chain's conclusion from the hypothesis test using a 5% level of significance is:
A)to open a new store.
B)not to open a new store.
C)to delay opening a new store until additional evidence is collected.
D)we cannot tell what the decision should be from the information given.

Question

Quizplus · Accepted Answer

The sample proportion of households with a favorable view is 96/300 = 0.32. The sample size is 300, which is greater than 30. The population proportion is 0.5. The standard error of the proportion is sqrt(0.5*0.5/300) = 0.03. The z-score is (0.32 - 0.5)/0.03 = -6.67. The p-value is less than 0.05, so the null hypothesis is rejected. The pizza chain should open a new store.

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