In the 1970's and 1980's, PepsiCo, and maker of Pepsi, began airing television commercials in which it claimed more cola drinkers preffered Pepsi over Coca- Cola in a blind taste test. The Coca-Cola Company, maker of Coca-Cola, was the market leader in soda sales. After the television ads began airing, Pepsi sales increased and began rivaling Coca-Cola sales.

Assume the claim is that more than 50% of cola drinkers preferred Pepsi over Coca-Cola. You work for an independent market research firm and are asked to test this claim.

2.) Testing a Proportion

In your study, 280 out of 560 cola drinkers prefer Pepsi over Coca-Cola. Using these results, test the claim that more than 50% of cola drinkers prefer Pepsi over Coca-Cola. Use (alpha) = 0.05. Interpret your decision in the context of the original claim. Does the decision support PepsiCo's claim?