A large consumer goods company ran a television advertisement for one of its soap products. On the basis of a survey that was conducted, probabilities were assigned to the following events. B individual purchased the product S = individual recalls seeing the advertisement BnS = individual purchased the product and recalls seeing the advertisement The probabilities assigned were P(B) = 0.20, P(S) = 0.40, and P(BS) = 0.12. a. What is the probability of an individual's purchasing the product given that the individual recalls seeing the advertisement (to 1 decimal)? Does seeing the advertisement increase the probability that the individual will purchase the product? - Select your answer - As a decision maker, would you recommend continuing the advertisement (assuming that the cost is reasonable)? - Select your answer - b. Assume that individuals who do not purchase the company's soap product buy from its competitors. What would be your estimate of the company's market share (to the nearest whole number)? % Would you expect that continuing the advertisement will increase the company's market share? Why or why not?
A large consumer goods company ran a television advertisement for one of its soap products. On the basis of a survey that was conducted, probabilities were assigned to the following events. B individual purchased the product S = individual recalls seeing the advertisement BnS = individual purchased the product and recalls seeing the advertisement The probabilities assigned were P(B) = 0.20, P(S) = 0.40, and P(BS) = 0.12. a. What is the probability of an individual's purchasing the product given that the individual recalls seeing the advertisement (to 1 decimal)? Does seeing the advertisement increase the probability that the individual will purchase the product? - Select your answer - As a decision maker, would you recommend continuing the advertisement (assuming that the cost is reasonable)? - Select your answer - b. Assume that individuals who do not purchase the company's soap product buy from its competitors. What would be your estimate of the company's market share (to the nearest whole number)? % Would you expect that continuing the advertisement will increase the company's market share? Why or why not?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A large consumer goods company ran a television advertisement for one of its soap products. On the basis of a survey that was conducted, probabilities were
assigned to the following events.
B = individual purchased the product
S = individual recalls seeing the advertisement
BnS = individual purchased the product and recalls seeing the advertisement
The probabilities assigned were P(B) = 0.20, P(S) = 0.40, and P(BS) = 0.12.
a. What is the probability of an individual's purchasing the product given that the individual recalls seeing the advertisement (to 1 decimal)?
Does seeing the advertisement increase the probability that the individual will purchase the product?
- Select your answer -
As a decision maker, would you recommend continuing the advertisement (assuming that the cost is reasonable)?
- Select your answer -
+
b. Assume that individuals who do not purchase the company's soap product buy from its competitors. What would be your estimate of the company's market
share (to the nearest whole number)?
%
+
Would you expect that continuing the advertisement will increase the company's market share? Why or why not?
- Select your answer -
♦
c. The company also tested another advertisement and assigned it values of P(S) = 0.30 and P(BS) = 0.10. What is P(BS) for this other advertisement
(to 3 decimals)?
Which advertisement seems to have had the bigger effect on customer purchases?
Select your answer -
+
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