# Question

The drug manufacturer in Exercise

8.199 has a different viewpoint on the matter. It wants to market the new drug starting as soon as possible so that it can beat its competitors to the marketplace and make lots of money. Its position is,“Market the drug unless the drug is totally ineffective.”

a. How would the drug company set up the alternative hypothesis if it were doing the testing: Ho: r < A, Ha: r = A, Ha: r > A? Explain.

b. Does the mortality rate (A = 0.95 or A = 0.05) of the existing treatment affect the alternative? Explain.

8.199 has a different viewpoint on the matter. It wants to market the new drug starting as soon as possible so that it can beat its competitors to the marketplace and make lots of money. Its position is,“Market the drug unless the drug is totally ineffective.”

a. How would the drug company set up the alternative hypothesis if it were doing the testing: Ho: r < A, Ha: r = A, Ha: r > A? Explain.

b. Does the mortality rate (A = 0.95 or A = 0.05) of the existing treatment affect the alternative? Explain.

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