SCENARIO 17-15 The Tree Diagram Below Shows the Results of the Classification

question 30

Short Answer

SCENARIO 17-15
The tree diagram below shows the results of the classification tree model that has been constructed to
predict the probability of a cable company's customers who will switch ("Yes" or "No") into its
bundled program offering based on the price ($30, $40, $50, $60) and whether the customer spends
more than 5 hours a day watching TV ("Yes" or "No") using the data set of 100 customers collected
from a survey.
-Referring to Scenario 17-15, the first split occurs at what price?

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Definitions:

Price

The amount of money required to purchase a good or service, often determined by factors such as supply and demand.

Perfectly Competitive Firm

A company that operates in a market where there are many buyers and sellers, the product is homogeneous, and there are no barriers to entry or exit.

Normal Profit

Normal profit occurs when a firm's total revenue is equal to its total costs, including the opportunity costs of capital, providing no incentive for entry or exit in the industry.

Yearly Licensing Fee

An annual charge paid to obtain the rights to use a particular piece of intellectual property, software, or other specific products/services.