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.