The probability that a new advertising campaign will increase sales is assessed as being 0.80. The probability that the cost of developing the new ad campaign can be kept within the original budget allocation is 0.40. Assuming that the two events are independent, the probability that the cost is kept within budget and the campaign will increase sales is
A) 0.20.
B) 0.32.
C) 0.40.
D) 0.88.

Question

Quizplus · Accepted Answer

The probability of both events occurring is equal to the product of their individual probabilities: 
P(cost within budget and sales increase) = P(cost within budget) x P(sales increase) = 0.40 x 0.80 = 0.32. Therefore, the best choice is B.

The Probability That a New Advertising Campaign Will Increase Sales