Question: The observed risk of an accident per month at a busy intersection without any stoplights was 1%. The potential benefit of adding a stoplight was studied by using a computer simulation modeling the typical traffic flow for a month at that intersection. In 10,000 repetitions, a total of 50 simulated accidents occurred.
a. What is the estimated probability of an accident in a month at the intersection with a stoplight added?
b. Would adding the stoplight be a good idea? Explain.