Question

The probability that a new advertising campaign will increase sales is assessed as being 0.80. The probability that the cost of developing the new ad campaign can be kept within the original budget allocation is 0.40. Assuming that the two events are independent, the probability that the cost is kept within budget or the campaign will increase sales is:

Answer 1

Answer:

The probability that the cost is kept within budget or the campaign will increase sales is 0.88

Step-by-step explanation:

The probability that the cost is kept within budget (event A) or the campaign will increase sales (event B) is the union of the probability of those two events. By basic properties of probability, this is:

P(A ∪ B) = P(A) + P (B) - P(A ∩ B)

and for independent events:

P(A ∩ B) = P(A) * P(B)

So:

P(A ∪ B) = 0.80 + 0.40 - (0.80*0.40) = 1.20 - 0.32 = 0.88