Problem statement: Consider a probabilistic model where there are two states of the world, framed as complimentary events: $A$: All chocolates are black and $A^C$: 50% of chocolates are black. Let $p$ be the prior probability $P(A)$ that all chocolates are black. Assume we make an observation of a chocolate with probability $q$, independent of $A$. Also assume $0 \lt p,q \lt 1$. Given the event $B$: a black chocolate is observed, what is $P(A|B)$?
I used Bayes' Rule to expand $P(A|B)$: $$ P(A|B) = \frac{P(B|A)P(A)}{P(B)} \\ = \frac{P(B|A)P(A)}{P(B|A)P(A) + P(B|A^C)P(A^C)} \\ = \frac{p^2}{p^2 + (1-p)^2} $$
I'm slightly unclear about the conditional probabilities $P(B|A)$ and $P(B|A^C)$.
- $P(B|A)$ reads as "the probability that a black chocolate is observed given that all chocolates are black." I would interpret this to have a probability of $p$ since $A$ occurs with probability $p$.
- $P(B|A^C)$ reads as "the probability that a black chocolate is observed given that 50% of chocolates are black." I would interpret this to have probability $1-p$ since $A^C$ occurs with probability $1-p$.
Are these interpretations to solve $P(A|B)$ correct?
self-study
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