Two events are mutually exclusive when they cannot occur at the same time. Two events are independent when the occurrence of one event does not affect the occurrence of the others.
- Identify from your field of interest two events you would like to study.
- Describe a scenario when the two events above will be considered mutually exclusive.
- Describe a scenario when the two events above will be considered independent. What can you say about the main difference between mutually exclusive event and independent event?
As a Business Administration student, I am interested in the field of economics which I will discuss in the following assignment.
In the field of economics, two events that I would like to study are the demand for a particular product and the price of that product. These two events are closely related and understanding their relationship is crucial for businesses to make informed decisions.
A scenario where the demand for a product and its price are considered mutually exclusive is when there is a fixed supply of the product. Let’s consider the market for concert tickets. If there are only a limited number of tickets available for a popular concert, the demand for those tickets will likely exceed the supply. In this case, the price of the tickets will increase due to high demand. On the other hand, if there are plenty of tickets available and the demand is low, the price may decrease. Therefore, in this scenario, the price and demand are mutually exclusive as they cannot occur at the same time. Either the price will be high with high demand or low with low demand.
A scenario where the demand for a product and its price are considered independent is when there are multiple substitute products available in the market. Let’s consider the market for smartphones. In this case, consumers have various options to choose from, such as iPhones, Samsung Galaxy, Google Pixel, etc. The demand for a particular brand or model of smartphone may not be affected by its price alone. Factors like brand loyalty, features, performance, and customer reviews also play a significant role in determining consumer demand. Therefore, even if the price of a smartphone increases, consumers may still be willing to purchase it if they perceive it to be superior in other aspects. Similarly, if the price decreases, it may not necessarily lead to a significant increase in demand if consumers prefer other brands or models. Hence, in this scenario, the demand and price of smartphones are independent as one event does not affect the occurrence of the other.
The main difference between mutually exclusive events and independent events lies in their relationship and influence on each other. Mutually exclusive events cannot occur simultaneously, while independent events can occur without any influence from one another. In the case of mutually exclusive events, the occurrence of one event excludes the possibility of the other event happening. On the other hand, in the case of independent events, the occurrence or non-occurrence of one event has no impact on the occurrence of the other event (BYJU’S, n.d.).
References BYJU’S. (n.d.). Difference Between Mutually Exclusive and Independent Events. Retrieved from https://byjus.com/maths/difference-between-mutually-exclusive-and-independent-events/