Question

Refer the table below. Our original information was that the probability of High demand was 6. We collected the following new information about what happened to demand when there was an improving or not improving economy. Answer the below question What is the probability of an improving economy? Improving Economy Not improving economy Given high demand 0.78 Given Low demand Answer format: Number Round to: 2 decimal places

Answer 1

1: Improving economy given low demand= 1-0.48 = 0.52

Probability of an improving economy= probability of high demand* improving economy given high demand+ probability of low demand* improving economy given low demand

= 0.6*0.78 +0.4*0.52

= 0.676

2: expected value= Sum of (probability* state of success)

= 0.12*5000+0.4*3500+0.48*-905

= 1565.60

3: expected value= Sum of (probability* state of success)

= 0.21*2407+0.4*2407+0.39*240.7

=2407