A firm is about to launch a new consumer product that is purchased frequently (e.g., toothpaste)...

A firm is about to launch a new consumer product that is purchased frequently (e.g., toothpaste) and plans a massive advertising campaign. After analyzing focus group outcomes, company estimates that:

– 35% of the potential buyers will see the ads.

– Of those who see the ads, 40% will try the product.

– Of those who try the product after seeing the ads, 45% will become regular users.

The firm also estimates that:

– Of those potential buyers who do not see the ads, 25% will try the product anyway.

– Of those who try the product despite not seeing the ads, 30% will become regular users.

With these data in hand, compute the following probabilities:

1. The chance that a randomly chosen user will become a regular user of the product.

2. The chance that someone who sees the ads will become a regular user.

3. The chance that someone who does not see the ads will not become a regular user.

4. The fraction of those who become regular users who will have seen the ads.

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Expert Solution

orchestra answered 1 year ago

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