Exhibit 9-7.Vermont-based Green Mountain Coffee Roasters dominates the market for single-serve coffee in the United States,with its subsidiary Keurig accounting for approximately 70% of sales ("Rivals Try to Loosen Keurig's Grip on Single-Serve Coffee Market," Chicago Tribune,February 26,2011).But Keurig's patent on K-cups,the plastic pods used to brew the coffee,is expected to expire in 2012,allowing other companies to better compete.Suppose a potential competitor has been conducting blind taste tests on its blend and finds that 47% of consumers strongly prefer its French Roast to that of Green Mountain Coffee Roasters.After tweaking its recipe,the competitor conducts a test with 144 tasters,of which 72 prefer its blend.The competitor claims that its new blend is preferred by more than 47% of consumers to Green Mountain Coffee Roasters' French Roast. Refer to Exhibit 9-7.At the 1% significance level,does the evidence support the claim?

Question

Quizplus · Accepted Answer

The test statistic is calculated to determine if the sample proportion (72/144 = 0.5) is significantly greater than 0.47. At the 1% significance level, if the test statistic is less than the critical value, we do not have enough evidence to support the claim that more than 47% prefer the new blend.