Two professors at a nearby university want to coauthor a new textbook in either economics or statistics. They feel that if they write an economics book, they have a 50 percent chance of placing it with a major publisher, and it should ultimately sell about 40,000 copies. If they cannot get a major publisher to take it, then they feel they have an 80 percent chance of placing it with a smaller publisher, with ultimate sales of 30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40 percent chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If they cannot get a major publisher to take it, they feel they have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies.
What is the probability that the economics book would wind up being placed with a smaller publisher?
A) .8
B) .5
C) .4
D) .2
E) .1

Question

Two professors at a nearby university want to coauthor a new textbook in either economics or statistics. They feel that if they write an economics book, they have a 50 percent chance of placing it with a major publisher, and it should ultimately sell about 40,000 copies. If they cannot get a major publisher to take it, then they feel they have an 80 percent chance of placing it with a smaller publisher, with ultimate sales of 30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40 percent chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If they cannot get a major publisher to take it, they feel they have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies.
What is the probability that the economics book would wind up being placed with a smaller publisher?
A) .8
B) .5
C) .4
D) .2
E) .1

Quizplus · Accepted Answer

If the economics book is not placed with a major publisher, the probability of it being placed with a smaller publisher is 80%. Therefore, the probability that the economics book would wind up being placed with a smaller publisher is 0.5 * 0.8 = 0.4.

To determine the best choice, we need to consider the expected sales for each option. For the economics book, the expected sales are:

0.5 * 40,000 + 0.5 * 0.8 * 30,000 = 35,000

For the statistics book, the expected sales are:

0.4 * 50,000 + 0.6 * 0.5 * 35,000 = 42,000

Therefore, the best choice is to write the statistics book, as it has a higher expected sales value.

Two Professors at a Nearby University Want to Coauthor a New