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% are huge successes, 30% are modestsuccesses, 30% break even, and 20% are losers. However, before a publishing decision is made, the book will be reviewed. In the past, 98% of the huge successes received favorable reviews, 70% of the moderate successes received favorable reviews, 50% of the break-even books received favorable reviews, and 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

(Round to three decimal places as needed.)

The probability that if the proposed textbook receives a favorable review, the book will be a modest success is

(Round to three decimal places as needed.)

The probability that if the proposed textbook receives a favorable review, the book will break even is

.(Round to three decimal places as needed.)

The probability that if the proposed textbook receives a favorable review, the book will be a loser is

(Round to three decimal places as needed.)

b. What proportion of textbooks receives favorable reviews?

The proportion of textbooks that receive a favorable reviews is

Explanation / Answer

probability of fav review =P(huge success and fav review+ modest success and fav review+break even and fav review+loser and fav review) =0.2*0.98+0.3*0.7+0.3*0.5+0.2*0.2=0.596

a)

probability that if the proposed textbook receives a favorable review, the book will be a huge success is

=0.2*0.98/0.596 =0.329

probability that if the proposed textbook receives a favorable review, the book will be a modest success is

=0.3*0.7/0.596 =0.352

The probability that if the proposed textbook receives a favorable review, the book will break even

=0.3*0.5/0.596 =0.252

The probability that if the proposed textbook receives a favorable review, the book will be a loser is

=0.2*0.2/0.596 =0.067

b)

proportion of textbooks receives favorable reviews =0.596

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