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Question

In a car rental company 's fleet, 70% of the cars are American brands, 20% are Japanese, and the rest are German. The company notes that manufacturers' recalls seem to affect 2% of the American cars, but only 1% of the others.

What's the probability that a recalled car is American?

Solution

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Answered 7 months ago
Answered 7 months ago
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Let AA="American" and JJ="Japanese" and GG="German" and BB="recall"

P(A)=70%=0.7P(J)=20%=0.2P(G)=10%=0.1P(BA)=2%=0.02P(BJ)=1%=0.01P(BG)=1%=0.01\begin{aligned} P(A)&=70\%=0.7 \\ P(J)&=20\%=0.2 \\ P(G)&=10\%=0.1 \\ P(B|A)&=2\%=0.02 \\ P(B|J)&=1\%=0.01 \\ P(B|G)&=1\%=0.01 \end{aligned}

General multiplication rule:

P(A and B)=P(AB)=P(A)×P(BA)=P(B)×P(AB)P(A\text{ and }B)=P(A\cap B)=P(A)\times P(B|A)=P(B)\times P(A|B)

Definition Conditional probability:

P(BA)=P(AB)P(A)=P(A and B)P(A)P(B|A)=\dfrac{P(A\cap B)}{P(A)}=\dfrac{P(A\text{ and }B)}{P(A)}

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