A recently-accredited College of Business discovers it is in
dire financial trouble and wants to examine demand for services and
costs to provide them next year. Market conditions may become more
favorable, resulting in a 10% increase in enrollment, with a
probability of 0.5, stay the same, with a probability of 0.3, or
become less favorable, with a probability of 0.2 and a decrease in
enrollment of 10%. There is a 0.9 probability that their costs to
provide services will rise by 5% and a 0.1 probability that their
costs will be the same. This year, they charge each of their 2000
students $3000 to take a full course load and spend $1500 on each
student.
What is the probability that the college experiences a decrease in
enrollment and an increase in their cost to provide services?
|
0.27 |
||
|
0.45 |
||
|
0.02 |
||
|
0.18 |
Probability to decrease enrollment -0.2
Probability to increase the cost - 0.9
Conditional probability for two independent events will be a multiplication of individual probabilities.
probability of decrease enrollment and increased cost will be = 0.2 * 0.9
p(a/b) = 0.18
Answer is 0.18
A recently-accredited College of Business discovers it is in dire financial trouble and wants to examine...
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