Suppose a store sells two different coffee makers of a particular brand, a basic model selling for

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Suppose a store sells two different coffee makers of a particular brand, a basic model selling for $30 and a fancy one selling for $30 and a fancy one selling for $50. Let X denote the number of people among the next 25 purchasing this brand who choose the more expensive model. Then h(X) = revenue = 50X + 30(25 − X) = 20X + 750, a linear function. If the choices are independent and have the same probability, then how is X distributed? Find the mean and standard deviation of h(X). Explain why the choices might not be independent with the same probability.

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Modern Mathematical Statistics With Applications

ISBN: 9783030551551

3rd Edition

Authors: Jay L. Devore, Kenneth N. Berk, Matthew A. Carlton

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