On any given day, a car dealership sells 0, 1, 2, 3, or 4 cars with probabilities
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Question:
On any given day, a car dealership sells 0, 1, 2, 3, or 4 cars with probabilities 0.05, 0.20, 0.25, 0.40, 0.10 respectively. (They never sell more than 4 cars). Suppose they make a profit of $3500 from each car sold, but they have a fixed cost of $1700 per day for rent and salaries. Let the random variable Y = the net profit per day. (i.e., the profit from the sales of cars minus fixed cost).
a) Construct the probability distribution table for Y.
b) Calculate E(Y), and explain what it means. [3 marks]
Related Book For
Essentials of Business Statistics
ISBN: 978-0078020537
5th edition
Authors: Bruce Bowerman, Richard Connell, Emily Murphree, Burdeane Or
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