A shop finds that the number of a particular product sold on a given day is a Poisson distribution with parameter 1000/p2 where p is the price in dollars that it charges for the product. The product costs the shop $8 to buy. (a) How much should it charge for the product, in order to maximise its expected profit? (b) It costs the shop $400 per day to stay open. How much should it charge for the product to maximise the probability that it makes at least this much profit on a given day.
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
A shop finds that the number of a particular product sold on a given day is a Poisson distribution with parameter 1000/p2 where p is the price in dollars that it charges for the product. The product costs the shop $8 to buy.
(a) How much should it charge for the product, in order to maximise its expected profit?
(b) It costs the shop $400 per day to stay open. How much should it charge for the product to maximise the
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