The editor of a textbook publishing company is trying to decide whether to publi

Question

The editor of a textbook publishing company is trying to decide whether to publish a proposed business statistics textbook. Information on previous textbooks published indicate that 20% are huge successes, 30% are modest successes, 30% break even, and 20 are losers. However, be ore a publishing decision is made. the book will be reviewed. In the past 99% of the huge successes received favorable reviews, 70% o e moderate successes received fa rable reve s 40%, ofthe break even books received favorable reviews, and 30% of the losers received favorable reviews. Complete parts (a) and (b) a. If the proposed textbook receives a favorable review, how should the editor revise the probabilities of the various outcomes to take this information into account? The probability that if the proposed textbook receives a favorable review, the book will be a huge success is(Round to three decimal places as needed.) The probability that if the proposed textbook receives a favorable review, the book will be a modest success is (Round to three decimal places as needed.) The probability that if the proposed textbook receives a favorable review, the book will break even is (Round to three decimal places as needed.) The probability that if the proposed textbook receives a favorable review, the book will be a loser is. (Round to three decimal places as needed.) b. What proportion of textbooks receives favorable reviews? The proportion of textbooks that receive a favorable reviews is Round to three decimal places as needed.)

Explanation / Answer

first we need to do part b)

b)proportion of textboks that receives a favourable review =P( huge success & vavourable review+huge success & vavourable review+huge success & vavourable review+huge success & vavourable review)

=0.2*0.99+0.3*0.7+0.3*0.4+0.2*0.30=0.588

a)probability of huge success given favourable review =0.2*0.99/0.588 =0.337

probability of modest success given favourable review =0.3*0.7/0.588 =0.357

probability of break even given favourable review =0.3*0.4/0.588 =0.204

probability of losers given favourable review =0.2*0.3/0.588 =0.102

please revert for any clariication

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