Assume that out of every 50 people in a city, 1 is a business owner. So, If one citizen is selected randomly, what is the distribution of business owners?

P(X=x) = \$p^x q^(1-x)\$
where x =0,1
q=1-p

Given probability

p = \$1/50\$

Then q = 1-p

q = \$1 -(1/50)\$

Substitute x=0

P(X=0) = \$(1/50)^0 (1 -(1/50))^(1-0)\$

P(X=0)

\$1 -(1/50) = 49/50\$ = 0.98

Substitute x=1

P(X=1) = \$(1/50)^1 (1 -(1/50))^(1-1)\$

P(X=1)

\$(1/50)\$

Probability of success

selected citizen being a business owner = 0.02

Probability of failure

selected citizen not being a business owner = 0.98

Answer

D