Suppose That a Firm Offers Secret Discounts to 200 Customers

question 14

Short Answer

Suppose that a firm offers secret discounts to 200 customers in a particular industry to attract those customers from a competitor firm.If there is a 2% probability that any one of those customers will disclose the pricing,what is the probability that the firms competitors will hear from one of those 200 customers? Suppose there are instead 20 buyers to which discounts are offered.What is the probability then that the competitors may find out about one of the discounts?

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Definitions:

Statutorily Secured Monopoly

A monopoly status granted and protected by law to a company, often due to the nature of the industry or service it provides.

Useful New Devices

Innovations or inventions that offer a new utility, often eligible for patent protection.

Fraudulent Marketing

The act of promoting products or services using deceptive, misleading, or false statements to lure consumers into purchasing.

Palming Off Goods

A deceptive practice where a seller misrepresents the origin, quality, or brand of a product to pass it off as another’s.