A drug manufacturer believes there is a 0.95 chance that the Food and Drug Administration (FDA) will approve a new drug the company plans to distribute if the results of current testing show that the drug causes no side effects. The manufacturer further believes there is a 0.50 probability that the FDA will approve the drug if the test shows that the drug does cause side effects. A physician working for the drug manufacturer believes there is a 0.20 probability that tests will show that the drug causes side effects. What is the probability that the drug will be approved by the FDA?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
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. A drug manufacturer believes there is a 0.95 chance that the Food and Drug
Administration (FDA) will approve a new drug the company plans to distribute if
the results of current testing show that the drug causes no side effects. The manufacturer
further believes there is a 0.50 probability that the FDA will approve the
drug if the test shows that the drug does cause side effects. A physician working for
the drug manufacturer believes there is a 0.20 probability that tests will show that
the drug causes side effects. What is the probability that the drug will be approved
by the FDA?
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