In the course of her investigation, Sloan is also interested in whether customers would purchase amore expensive bike design that can fold. A bicycle that can fold takes very little space in a home. Inthe collected sample, there are 250 people that own a Kiloton bicycle. 60% of bicycle owners careabout saving space in their homes, and 40% of those are willing to pay more for a foldable bicycle.The other 40% do not care about saving space, and only 15% of those are prepared to pay more for afoldable bicycle.Draw a probability tree to help you to work out the following two probabilities. Round your answersto 4dp.:a) The probability that a randomly chosen person is willing to pay for a more expensive foldablebicycle;b) The probability that a person cares about saving space given they are willing to pay for amore expensive design.

Answered: In the course of her investigation,…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

In the course of her investigation, Sloan is also interested in whether customers would purchase a
more expensive bike design that can fold. A bicycle that can fold takes very little space in a home. In
the collected sample, there are 250 people that own a Kiloton bicycle. 60% of bicycle owners care
about saving space in their homes, and 40% of those are willing to pay more for a foldable bicycle.
The other 40% do not care about saving space, and only 15% of those are prepared to pay more for a
foldable bicycle.
Draw a probability tree to help you to work out the following two probabilities. Round your answers
to 4dp.:
a) The probability that a randomly chosen person is willing to pay for a more expensive foldable
bicycle;
b) The probability that a person cares about saving space given they are willing to pay for a
more expensive design.

Expert Solution

Step 1

Probability is the chances of occurrence of an event and it can take values from 0 to 1. The probability is ratio of number of favourable outcomes to total number of possible outcomes.

The probability of an event A when the event B occurred is called conditional probability of A and it can be computed by $P (A | B) = \frac{P (A and B)}{P (B)}$ . According to law of total probability, if there are $A_{1}$ and $A_{2}$ portions of a sample space then the probability of an event B is computed by $P (B) = P (A_{1} and B) + P (A_{2} and B)$ .