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 a not improving economy?

Improving Economy Not improving economy

Given high demand 0.82

Given Low demand 0.48

Submit

Answer format: Number: Round to: 2 decimal places.

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#24

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.

Calculate the probability for high demand and the improving economy?

Improving Economy Not improving economy

Given high demand 0.58

Given Low demand 0.51

Answer 1

Solution:-

1) Probability of a not improving economy= P(H)*P(E|H)+P(L)*P(E|L)

where P (H) = Probability of High demand = 0.6

P(E|H) = Probability of not improving economy given high demand = 1- 0.82 = 0.35

P ( L) = Probability of Low demand = 1-0.6 = 0.4

P(E|L) = Probability of a not improving economy given low demand = 0.48

Thus, Probability of a not improving economy= P(H)*P(E|H)+P(L)*P(E|L)

                                                                                              = 0.6 * 0.35 + 0.4* 0.46

                                                                                              = 0.21 + 0.184

                                                                                              = 0.394

2) The probability of high demand = 0.6.

Therefore, the probability of an improving economy and high demand = the probability of improving economy given high demand * The probability of high demand = 0.58 * 0.6

                                                                   = 0.348