Two different companies have applied to provide cable television service in a certain region. let p denote the proportion of all potential subscribers who favor the first company over the second. consider testing h0: p = 0.5 versus ha: p ≠ 0.5 based on a random sample of 25 individuals. let the test statistic x be the number in the sample who favor the first company and x represent the observed value of x.

The one of the rejection regions which is most appropriate is R1, because x either too large or too small contradicts p=  .5 and supports p is not equal .5 A type I error consists of judging one of the two companies favored over the other when in fact there is a 50-50 split in the population. A type II error will involves judging the split to be 50-50 when it is not.

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