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Unformatted text preview: is .5. Also, the probability that both fixed costs and demand will be high is .4. The probability that both fixed costs and demand will be high in both markets is .35. The probability that both fixed costs and demand will be low in both markets is .25. The probability that fixed costs will be low and demand will be high in both markets is .125. The probability is zero that fixed costs and demand will both be high in one market, and both be low in the other market. The remaining probability is evenly distributed over the remaining basic outcomes. Give the probability distribution over the sample space. f. Are the two markets statistically independent? Explain why or why not. g. What is P(A)? What is P(B)?...
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This note was uploaded on 02/26/2012 for the course ECONOMICS 329 taught by Professor Bencivenga during the Spring '12 term at University of Texas at Austin.
- Spring '12