A Law Firm Has Submitted Bids on Two Separate State

question 4

Short Answer

A law firm has submitted bids on two separate state contracts, A and B.The company feels that it has a 40% chance of winning contract A, and a 60% chance of winning contract B.Furthermore, the company believes that it has a 75% chance of winning contract B, given that it wins contract A. If the firm wins contract A, what is the probability that it will not win contract B?

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Definitions:

Law of Diminishing Returns

A principle stating that as one factor of production is increased while others are held constant, the resulting addition to output will eventually decrease.

Coase Theorem

An economic theory stating that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own.

Director of Housing

A position responsible for overseeing housing programs, policies, and services, typically within a governmental or nonprofit organization.

Marginal Benefit (MB) Curves

Graphs that show the additional benefit received from consuming one more unit of a good or service.