The telephone company wants to investigate the desirability of beginning a marke

Question

The telephone company wants to investigate the desirability of beginning a marketing campaign that would offer customers the right to purchase an additional telephone line at a substantially reduced installation cost. The campaign will be initiated if there is evidence that more than 20% of the customers would consider purchasing an additional telephone line if it were made available at a substantially reduced installation cost. A random sample of 600 households is selected. The results indicate that 142 of households would purchase the additional telephone line at a reduced installation cost. Complete parts a and b. Click here to view page 1 of the Normal table. Click here to view page 2 of the Normal table. At the 0.05 level of significance, is there evidence that more than 20% of customers would purchase the additional telephone line? Let Pi be the population proportion. Determine the null hypothesis, H_0, and the alternative hypothesis, H_1. H_0 : Pi Inequality 0.20 H_1: Pi > 0.20 What is the test statistic? Z_STAT = 2.25 (Round to two decimal places as needed.) What is the p-value?

Explanation / Answer

As this is a right tailed test, and z = 2.25:

Using a table, the left tailed area of this is          
          
P(z <   2.25   ) =    0.9878
          
Thus, the right tailed area is the complement,          

P(z >   2.25   ) =    0.0122 [ANSWER]

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