A Company Is Considering Producing a New Children's Bar Soap

question 109

Multiple Choice

A company is considering producing a new children's bar soap.A market research firm has told the company that if they perform a survey,a positive survey of a favorable market occurs 65 percent of the time.That is,P(positive survey ∣ favorable market) = 0.65.Similarly,40 percent of the time the survey falsely predicts a favorable market;thus,P(positive survey ∣ unfavorable market) = 0.40.These statistics indicate the accuracy of the survey.Prior to contacting the market research firm,the company's best estimate of a favorable market was 50 percent.So,P(favorable market) = 0.50 and P(unfavorable market) = 0.50.Using Bayes' theorem,determine the probability of a favorable market given a favorable survey.

• A)0.62
• B)0.38
• C)0.53
• D)0.65
• E)None of the above

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Definitions:

National Mining Association

An organization representing the interests of the mining industry in the United States, including corporations and stakeholders involved in extraction and processing.

Star Augers

Typically, mechanical devices that are used for drilling holes in a variety of materials, but can also refer to a specific component within packaging or manufacturing machinery for metering product.

Counter Suggestion

An alternative proposal or idea presented in response to someone's suggestion or opinion.

Indirect Suggestion

A method of influencing others by implying or hinting at a desired action or decision rather than stating it outright.