Conditional probabilities Prior probabilities
P(Low survey | Low demand) = 0.70 P(Low demand) = 0.15
P(Fair survey | Low demand) = 0.20 P(Fair demand) = 0.40
P(High survey | Low demand) = 0.10 P(High demand) = 0.45
Fair demand 0.40 0.40 0.160 0.516
High demand 0.10 0.45 0.045 0.145
P(Low survey) = 0.310
Posterior probabilities GIVEN fair survey
Conditional prob Prior Joint Posterior
Problem 8-46
0.15
0.45
High demand
$500
$500 $500.00
0.45
High demand
$800
$800 $800.00
0.145
High demand
$450
$500 $450
0.145
High demand
$750
$800 $750
0.145
High demand
$950
$1,000 $950
$0 450.00 $500 $450
Problem 8-46