SCENARIO 4-12 A Consulting Firm That Surveyed Consumers' Holiday Shopping Behavior Found

question 39

Essay

SCENARIO 4-12
A consulting firm that surveyed consumers' holiday shopping behavior found that the percentage of
consumers from the U.S., Canada, and China who said that they planned to spend more on holiday
shopping were 40%, 34% and 73%, respectively. The survey also found that the percentage of
consumers from the U.S., Canada, and China who said that they were willing to share personal
information with retailers in order to receive personalized offers from retailers were 55%, 46% and
72%, respectively. Assume that there are equal portions of consumers being surveyed from each of
the three countries, the survey results are good representations of the three populations of consumers,
and whether a consumer plans to spend more on holiday shopping is statistically independent of
whether he/she is willing to share personal information with retailers in order to receive personalized
offers from retailers.
-Referring to Scenario 4-12, if you randomly select a consumer from any of the three countries,
what is the probability that the consumer plans to spend more on holiday shopping and is not
willing to share personal information with retailers in order to receive personalized offers from
retailers?

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Definitions:

True Values

Refers to the actual, inherent value or worth of an item, property, or financial instrument, as opposed to its market price or cost.

Just over

Slightly more than a specified amount, number, or degree.

Consumer Surplus

The discrepancy between what consumers are ready and able to spend on a good or service and the amount they end up paying.

Producer Surplus

The difference between the amount that producers are willing to accept for a good or service and the actual amount they receive.