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

---

Definitions:

Unreasonably Dangerous

Describes a product or activity that poses a significant risk of injury to those using it in an expected or foreseeable manner, beyond what would be considered typical or manageable.

Hedge Clippers

Manual or powered gardening tools used for trimming and shaping hedges and bushes.

Manufacturer

A person or company that makes goods for sale, especially on a large scale or with industrial processes.

Alfred Adler

Austrian psychiatrist and founder of Individual Psychology, emphasizing the importance of the feeling of inferiority in the development of personality.