Foopon, a company that offers daily coupon deals, has the following business arrangement with a restaurant. A coupon for a $40 meal can be purchased by a consumer for $20 from Foopon, and the restaurant and Foopon split the $20 equally. Foopon sends an email message to a list of 100 potential consumers, who act independently, each of whom decides to buy a coupon with a probability of 0.1. The deal is “on” if at least 10 consumers decide to purchase a coupon. If only 9 or fewer consumers decide to purchase a coupon, then the deal is “off” and no coupons are sold.

(a) What is the probability that the deal is “on”?

Hint: When you compute summations involving binomial coefficients on a computer, you may run into numerical precision issues when n is large and p is small as it is in this problem. To avoid these numerical issues, you may want to compute the probability that the deal is not “on” first.

Calculate up to 2 decimal places.

Answer rating: 100% (QA)

Pdeal is on 1 Pdeal is off Pdeal is off P9 or fewer consumers decide to purchase a coupon P9 or fewe... View the full answer