For a luxury doughnut producer the average selling price is £2. The average variable cost is 40% of the selling price and its fi
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Answer:
The expected price paid by the next customer to buy a freezer is $466
Step-by-step explanation:
From the information given we know the probability mass function (pmf) of random variable X.
<em>Point a:</em>
- The Expected value or the mean value of X with set of possible values D, denoted by <em>E(X)</em> or <em>μ </em>is
Therefore
- If the random variable X has a set of possible values D and a probability mass function, then the expected value of any function h(X), denoted by <em>E[h(X)]</em> is computed by
So and
- The variance of X, denoted by V(X), is
Therefore
<em>Point b:</em>
We know that the price of a freezer having capacity X is 60X − 650, to find the expected price paid by the next customer to buy a freezer you need to:
From the rules of expected value this proposition is true:
We have a = 60, b = -650, and <em>E(X)</em> = 18.6. Therefore
The expected price paid by the next customer is