SAT Question 12dbe3de: Probability And Conditional Probability answer and explanation with Desmos solution

Choice B is incorrect because $0.04$ represents $4$ defective MP3 players out of $100$ rather than out of $1,000$.

Choice C is incorrect because $0.4$ represents $4$ defective MP3 players out of $10$ rather than out of $1,000$.

Choice D is incorrect. This is the number of defective MP3 players in the shipment.