Suppose that the chance of having both a favorable survey and a successful product launch is .3. In addition, the frequency of favorable market surveys for all new product launches is .5. Then the chance of a successful product launch given a favorable survey is:
A).8
B) .5
C) .4
D) .6
E) .3

Question

Quizplus · Accepted Answer

Let A be the event that there is a favorable survey and B be the event that there is a successful product launch.

The probability of having both a favorable survey and a successful product launch is given as P(A ∩ B) = 0.3.
The frequency of favorable market surveys is given as P(A) = 0.5.

We need to find the probability of a successful product launch given a favorable survey, which is P(B|A).

We know that P(A ∩ B) = P(A) * P(B|A) (multiplication rule of probability)
Therefore, P(B|A) = P(A ∩ B) / P(A) = 0.3 / 0.5 = 0.6

Hence, the answer is D) 0.6.

Suppose That the Chance of Having Both a Favorable Survey