A company has tested two versions of an introductory offer for its new digital entertainment mobile app. Promotion A offers a 7-day trial of the app for free, then requires a full-price monthly subscription to keep using it. Promotion B offers a half-price subscription for the first month, which must then be renewed at full price. The company identified a random sample of 500 app users for the test, who were offered a choice between the two promotions. 291 chose to receive Promotion A; the remaining 209 chose to receive Promotion B. Of those who chose Promotion A, 98 subscribed at full price following the introductory offer. Of those who chose Promotion B, 83 subscribed at full price following the introductory offer. a. Below, you will find a 2×2 contingency table with promotion choice (A or B) by row and decision to subscribe at full price following the introductory offer (Yes or No) by column. Complete the contingency table with joint and marginal frequencies (not probabilities) from the information above. b. In the sample, what is the marginal probability that someone chose Promotion A? What is the marginal probability that someone chose Promotion B? For those who received Promotion A, what is the probability that they went on to subscribe at full price? For those who received Promotion B, what is the probability that they went on to subscribe at full price?
A company has tested two versions of an introductory offer for its new digital entertainment mobile app. Promotion A offers a 7-day trial of the app for free, then requires a full-price monthly subscription to keep using it. Promotion B offers a half-price subscription for the first month, which must then be renewed at full price. The company identified a random sample of 500 app users for the test, who were offered a choice between the two promotions. 291 chose to receive Promotion A; the remaining 209 chose to receive Promotion B. Of those who chose Promotion A, 98 subscribed at full price following the introductory offer. Of those who chose Promotion B, 83 subscribed at full price following the introductory offer.
a. Below, you will find a 2×2
b. In the sample, what is the marginal probability that someone chose Promotion A? What is the marginal probability that someone chose Promotion B? For those who received Promotion A, what is the probability that they went on to subscribe at full price? For those who received Promotion B, what is the probability that they went on to subscribe at full price?
c. Compute the expected frequencies, assuming independence, of choosing a promotion (A or B) and the subsequent decision to subscribe at full price (Yes or No). d. Use the expected and actual frequencies to determine if the decision to subscribe at full price depends on which promotion was received. Specifically, report the appropriate test statistic, the p-value for that test statistic and your conclusion based on that p-value, at the a+.10 level.
*show work in excel and on contingency table
| Actual Frequencies | Subscribe at Full Price | ||||
| Yes | No | ||||
| Promotion | A | 98 | 291 | ||
| B | 83 | 209 | |||
| 500 | |||||
| Expected Frequencies | Subscribe at Full Price | ||||
| Yes | No | ||||
| Promotions | A | ||||
| B |
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