A market research firms conducts studies regarding the success of new products. The company is not always perfect in predicting the success.

A market research firms conducts studies regarding the success of new products. The company is

not always perfect in predicting the success. Suppose that there is a 50% chance that any new

product would be successful (and a 50% chance that it would fail). In the past, for all new

products that ultimately were successful, 80% were predicted to be successful (and the other

20% were inaccurately predicted to be failures). In addition, for all new products that were

ultimately failures, 70% were predicted to be failures (and the other 30% were inaccurately

predicted to be successes).

If the market research predicted that the product would be a success, what is the probability that

it would actually be a success? (6P)

a) 0.27

b) 0.73

c) 0.80

d) 0.24

e) 1.00