A farmer has 100 lb of apples and 50 lb of potatoes for sale. The market price

Question:

A farmer has 100 lb of apples and 50 lb of potatoes for sale. The market price for apples (per pound) each day is a random variable with a mean of 0.5 dollars and a standard deviation of 0.2 dollars. Similarly, for a pound of potatoes, the mean price is 0.3 dollars and the standard deviation is 0.1 dollars. It also costs him 2 dollars to bring all the apples and potatoes to the market. The market is busy with eager shoppers, so we can assume that he’ll be able to sell all of each type of produce at that day’s price.
a) Define your random variables, and use them to express the farmer’s net income.
b) Find the mean of the net income.
c) Find the standard deviation of the net income.
d) Do you need to make any assumptions in calculating the mean? How about the standard deviation?
Fantastic news! We've located the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Business Statistics

ISBN: 9780321925831

3rd Edition

Authors: Norean Sharpe, Richard Veaux, Paul Velleman

Question Posted: