Chapter 20, Problem 22PS

In Problem 20.16. an author is deciding which of two competing publishing companies to select to publish her new novel. Prior to making a �nal decision. the author decides to have an experienced reviewer examine her novel. This reviewer has an outstanding reputation for predicting the success of a novel. In the past, for novels that sold 1,000 copies, only $1\%$ received favourable reviews. In the past, for novels that sold 2,000 copies, only $1\%$ received favourable reviews. Of novels that sold 5,000 copies, $25\%$ received favourable reviews. Of novels sold 10,000 copies, $60\%$ received favourable reviews. Of novels that sold 50,000 copies, $99\%$ received favourable reviews. After examining the author’s novel, the reviewer gives it an unfavourable review.

a. Revise the probabilities of the number of books sold in light of the reviewer’s unfavourable review.

b. Use these revised probabilities to repeat Problem 20.16.

c. Compare the results in (b) to those in Problem 20.16.