to, Suppose the entire cola industry produces only two colas. Given that a person last purchased cola 1, there a 75% chance that her next purchase will be cola 1. Given that a person last purchased cola 2, there is an 80% chance that her next purchase will be cola 2. Suppose that each customer makes one purchase of cola during any week (52 weeks=1 year). Suppose there are 150 million customers. One selling unit of cola costs the company $0.5 to produce and is sold for $2. For $600 million per year, Britney Spears (by an advertising song) guarantees to decrease from 25% to 10% the fraction of cola 1 customers who switch to cola 2 after a purchase. Should the company that makes cola 1 hire Britney Spears (she is free from her dad)?

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tos Suppose the entire cola industry produces only two colas. Given that a person
last purchased cola 1, there a 75% chance that her next purchase will be cola 1. Given that a person
last purchased cola 2, there is an 80% chance that her next purchase will be cola 2. Suppose that each
customer makes one purchase of cola during any week (52 weeks=D1 year). Suppose there are 150 million
customers. One selling unit of cola costs the company $0.5 to produce and is sold for $2. For $600 million
per year, Britney Spears (by an advertising song) guarantees to decrease from 25% to 10% the fraction
of cola 1 customers who switch to cola 2 after a purchase. Should the company that makes cola 1 hire
Britney Spears (she is free from her dad)?
Transcribed Image Text:tos Suppose the entire cola industry produces only two colas. Given that a person last purchased cola 1, there a 75% chance that her next purchase will be cola 1. Given that a person last purchased cola 2, there is an 80% chance that her next purchase will be cola 2. Suppose that each customer makes one purchase of cola during any week (52 weeks=D1 year). Suppose there are 150 million customers. One selling unit of cola costs the company $0.5 to produce and is sold for $2. For $600 million per year, Britney Spears (by an advertising song) guarantees to decrease from 25% to 10% the fraction of cola 1 customers who switch to cola 2 after a purchase. Should the company that makes cola 1 hire Britney Spears (she is free from her dad)?
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