Question

A hotel market analyst wants to determine if the recent downgrade to 4 starts of one of the largest hotel chains in the country has had any effect on the distribution of shares within the hotel market. The current market share for the existing 3 largest hotel chains is shown in table below. The analyst collects data from a random sample of 200 hotel investors. The table below shows observed values (f_i ). The analyst performs a statistical test allowing for 1% error. The hypothesis to be tested follows:

H₀ : P_a =0.35; P_b =0.40; P_c =0.25 ; market shares have remained same

H_a : P_a ≠0.35; P_b ≠0.40; P_c ≠0.25 ; market shares have changed

Hotel Chain	Current Market Share	Observ. values fi
A	0.35	50
B	0.40	95
C	0.25	55
Totals		200

A)Compute the test statistic and perform the statistical test

B)Has the recent downgrade to 4 starts of one of the largest hotel chains in the country affected the distribution of shares in the hotel market

Answer 1