JK Foods tries to understand levels of customer satisfaction

JK Foods tries to understand levels of customer satisfaction in California (CA) and Pennsylvania (PA), the two biggest markets for the firm. A random sample of 100 customers was drawn in CA, and 50 respondents indicated that they were satisfied with JK

Solution

Sample size 1 = 100

Proportion = 50%

Sample size 2 = 100

Proportion = 45%

p1-p2 = 0.05

Combined p = 95/200 = 0.475

Std error = square root of (0.475)(0.525)/200 = 0.0353

Hence margin of error = 1.96(0.0353) = 0.0692

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95% confidence interval for differnce = (0.05-0.0692, 0.05+0.0692)

= (-0.0192,0.1384)