Before a marketing research study was done, John Colorado believed there was a 5

Question

Before a marketing research study was done, John Colorado believed there was a 50/50 chance that his music store would be a success. The research team determined that there is a 0.9 probability that the marketing research will be favorable given a successful music store. There is also a 0.8 probability that the marketing research will be unfavorable given an unsuccessful music store.

(a) If the marketing research is favorable, what is the revised probability of a successful music store?

(b) If the marketing research is unfavorable, what is the revised probability of a successful music store?

Explanation / Answer

using bayes' theorem

(a) required probability =

probability of favorable answer given a successful store/ (probability of favorable answer)

0.9*0.5/(0.9*0.5 + 0.2 * 0.5)= 9/11

(b) required probability = 0.1*0.5/(0.1*0.5 + 0.8 * 0.5)= 1/9

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