Final answer:
The ad placed in the local newspaper will be 70% effective in reaching recreational readers. Thus, the ad placed in the local newspaper will be 70% effective in reaching recreational readers.
Step-by-step explanation:
To determine the effectiveness of the ad, we need to find the probability that a newspaper subscriber is a recreational reader.
Given that all residents are either recreational readers or TV addicts, and the percentage of recreational readers is 20%, we can infer that the percentage of TV addicts is 100% - 20% = 80%.
From the survey results, we know that 7 out of 10 recreational readers are newspaper subscribers.
Therefore, the probability that a newspaper subscriber is a recreational reader is 7/10 = 0.7.
Thus, the ad placed in the local newspaper will be 70% effective in reaching recreational readers.