Question
A car dealership knows from past experience that 10% of potential customers (that is, persons who walk into the dealership and look at cars) will
A car dealership knows from past experience that 10% of potential customers (that is, persons who walk into the dealership and look at cars) will eventually purchase a car. The dealership has started offering a free dinner with a salesperson to any potential customer who agrees to listen to a complete sales presentation. While the free dinner will not increase the percentage of potential customers who buy cars from 10% (no one will buy a car just for a free dinner), management thinks that it will enable salespersons' to target their effort more effectively. To test the effectiveness of this sales program, a free dinner has been offered for six months. During this period, 40% of the people who purchased cars accepted the free dinner. In addition, 20% of the people who did not purchase cars accepted the free dinner.
a. What is the probability that a person does not accept the free dinner? Justify your answer and show all calculations. (5 points)
b. What is the probability that a person who accepts the free dinner will purchase a car? (5 points)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started