The editor of a textbook publishing company is trying to decide whether to publi

Question

The editor of a textbook publishing company is trying to decide whether to publish a proposed business statistics textbook. Information on previous textbooks published indicate that 20 %20% are huge successes, 30 %30% are modest successes, 30 %30% break even, and 20 %20% are losers. However, before a publishing decision is made, the book will be reviewed. In the past, 99 %99% of the huge successes received favorable reviews, 60 %60% of the moderate successes received favorable reviews, 40 %40% of the break-even books received favorable reviews, and 20 %20% of the losers received favorable reviews.

Complete parts (a) and (b). a. If the proposed textbook receives a favorable review, how should the editor revise the probabilities of the various outcomes to take this information into account? The probability that if the proposed textbook receives a favorable review, the book will be a huge success is nothing. (Round to three decimal places as needed.)

Explanation / Answer

probability that proposed textbook receives a favorable review =P(huge success and fav review+modest success and fav review+break even and fav review+loser and fav review)

=0.2*0.99+0.3*0.6+0.3*0.4+0.2*0.2=0.538

hence probability  book will be a huge success given  receives a favorable review

=P(huge success and fav review)/P(fav review) =0.2*0.99/0.538=0.36803

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.