A study of the relationship between facility conditions at gas stations and aggressiveness in the pricing...

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A study of the relationship between facility conditions at gasstations and aggressiveness in the pricing of gasoline reports theaccompanying data based on a sample of n = 385stations.

Table of Observed counts

                                       Observed pricing policy

                                                Aggressive      Neutral    Nonaggressive

                       Condition       Standard            52             73                 80

                                               Modern             58             86                 36

a. What is the expected cell count table under the nullhypothesis that the facility conditions and the aggressiveness ofthe pricing are independent?

b. Carry out a chi-square test for the independence. What is thevalue of test statistic?

c. What is the reject region for the significance level 0.01?Does the data suggest that facility conditions and pricing policyare independent of one another?

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