The editor of a textbook publishing company is trying to decide whether to publish a proposed business statistics text-book. Information on previous textbooks published indicates that 10% are huge successes, 20% are modest successes, 40% break-even, and 30% are losers. However, before a publishing decision is made, the book will be reviewed. In the past, 99% of the huge successes received favorable reviews, 70% of the moderate successes received favorable reviews, 40% of the break- even books received favorable reviews, and 20% of the losers received favor-able reviews.
a. If the proposed textbook receives a favorable review, how should the editor revise the probabilities of the various out-comes to take this information into account?
b. What proportion of textbooks receive favorable reviews?