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While studying two markets, you have been asked to determine if the difference in market share remains the same. Historically, in market 1 has had a 30% market share while market 2 has had a 35% market share. You obtain a random sample of potential customers from each market. From market 1, 258 out of a total sample of 800 indicate they will purchase from Company X. From market 2, 260 out of 700 indicate they will purchase from Company X.
[a] Using a probability of error, test the hypothesis that the market shares are equal versus the hypothesis that they are not equal (market 2 - market 1).
[b] Using a probability of error, test the hypothesis that the market shares are equal versus the hypothesis that the share in market 2 is larger.
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