newspaper publisher is considering launching a new \"national\"newspaper in Anytown. It is believed that the newspaper would haveto capture over 12% of the market in order to be financiallyviable. During the planning stages of this newspaper, a marketsurvey was conducted of a sample of 400 readers. After providing abrief description of the proposed newspaper, one question asked ifthe survey participant would subscribe to the newspaper if the costdid not exceed $20 per month. Suppose that 58 participants saidthey would subscribe.
a. Can the publisher conclude that the proposed newspaper willbe financially viable? Perform the appropriate test at a 1% levelof significance.
b. Suppose the actual value of the overall proportion of readerswho would subscribe to this newspaper is 0.13. Was the decisionmade in part (a) correct? If not, what type of error was made?
c. State the meaning of a Type I and Type II error in thecontext of this scenario. And what would be the repercussions ofmaking these errors to the publisher?
