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Each year, a company either makes a profit or takes a loss. If the company made a profit the year before, they will make a profit with probability 0.7. If they took a loss the year before, they will make a profit with probability 0.3. What is the long-run probability the company will make a profit?

Each year, a company either makes a profit or takes a loss. If the company made a profit the year before, they will make a profit with probability 0.7. If they took a loss the year before, they will make a profit with probability 0.3. What is the long-run probability the company will make a profit?

College Algebra (MindTap Course List)
College Algebra (MindTap Course List)
12th Edition
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:R. David Gustafson, Jeff Hughes
Chapter8: Sequences, Series, And Probability
Section8.7: Probability
Problem 50E: Medicine Out of a group of 9 patients treated with a new drug, 4 suffered a relapse. Find the...
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Please help me with this homework question. I am struggling so much.

Each year, a company either makes a profit or takes a loss. If the company made a profit the year before, they will make a profit with probability 0.7. If they took a loss the year before, they will make a profit with probability 0.3. What is the long-run probability the company will make a profit?
Transcribed Image Text:Each year, a company either makes a profit or takes a loss. If the company made a profit the year before, they will make a profit with probability 0.7. If they took a loss the year before, they will make a profit with probability 0.3. What is the long-run probability the company will make a profit?
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