A Market Research Firm Conducts Studies Regarding the Success of New

question 68

Multiple Choice

A market research firm conducts studies regarding the success of new products.The company is not always perfect in predicting the success.Suppose that there is a 50% chance that any new product would be successful (and a 50% chance that it would fail) .In the past, for all new products that ultimately were successful, 80% were predicted to be successful (and the other 20% were inaccurately predicted to be failures) .Also, for all new products that were ultimately failures, 70% were predicted to be failures (and the other 30% were inaccurately predicted to be successes) .If the market research predicted that the product would be a success, what is the probability that it would actually be a success?

• A)0.27
• B)0.73
• C)0.80
• D)0.24
• E)1.00

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