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An electronics retailer offers an optional protection plan for a mobile phone it sells. Customers can choose to buy the protection plan for [
An electronics retailer offers an optional protection plan for a mobile phone it sells. Customers can choose to buy the protection plan for
$ and in case of an accident, the customer pays a
$ deductible and the retailer will cover the rest of the cost of that repair. The typical cost to the retailer is
$ per repair, and the plan covers a maximum of
repairs.
Let
X be the number of repairs a randomly chosen customer uses under the protection plan, and let
F be the retailer's profit from one of these protection plans. Based on data from all of its customers, here are the probability distributions of
X and
F:
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