A study of 264 advertising firms revealed their income after taxes:
Income after Taxes | Number of Firms | ||
Under $1 million | 148 | ||
$1 million to $20 million | 67 | ||
$20 million or more | 49 | ||
a. What is the probability an advertising firm selected at random has under $1 million in income after taxes? (Round your answer to 2 decimal places.)
b-1. What is the probability an advertising firm selected at random has either an income between $1 million and $20 million, or an income of $20 million or more? (Round your answer to 2 decimal places.)
b-2. What rule of probability was applied?
Rule of complements only
Special rule of addition only
Either
a. Probability that an advertising firm selected at random has under $1 million in income after taxes?
= (148/264) = 0.56
b-1. Probability an advertising firm selected at random has either an income between $1 million and $20 million, or an income of $20 million or more
= (67/264) + (49/264) = 0.44
b-2. We can apply both the rules here. The solution given above is special rule of addition. We can also apply rule of complements. That is
Probability = 1 - P( firm has income under $1 million)
= 1 - (148/264) = 0.44
Rule of complements only
Special rule of addition only
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