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and Knee Clinic knows that their expected monthly revenue from pa level of advertising. They hire an econometric consultant who report onthly revenue, measured in $1000 units, is given by the following e VERT) 100+ 20 ADVERT, where ADVERT is advertising expendit. econometric consultant also claims that REVENUE is normally distri (REVENUE(ADVERT) = 900. of the relationship between expected REVENUE and ADVERT as es from 0 to 5. probability that REVENUE is greater than 110 if ADVERT= 2. Draw a trate your calculation. probability that REVENUE is greater than 110 if ADVERT = 3. and 97.5 percentiles of the distribution of REVENUE when ADVERT= robability that REVENUE will fall in this range if ADVERT = 2? level of ADVERT required to ensure that the probability of REVENUE 0 is 0.95.

and Knee Clinic knows that their expected monthly revenue from pa level of advertising. They hire an econometric consultant who report onthly revenue, measured in $1000 units, is given by the following e VERT) 100+ 20 ADVERT, where ADVERT is advertising expendit. econometric consultant also claims that REVENUE is normally distri (REVENUE(ADVERT) = 900. of the relationship between expected REVENUE and ADVERT as es from 0 to 5. probability that REVENUE is greater than 110 if ADVERT= 2. Draw a trate your calculation. probability that REVENUE is greater than 110 if ADVERT = 3. and 97.5 percentiles of the distribution of REVENUE when ADVERT= robability that REVENUE will fall in this range if ADVERT = 2? level of ADVERT required to ensure that the probability of REVENUE 0 is 0.95.

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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P.8 The Shoulder and Knee Clinic knows that their expected monthly revenue from patients depends on their level of advertising. They hire an econometric consultant who reports that their expected monthly revenue, measured in $1000 units, is given by the following equation E(REVENUE ADVERT) = 100 + 20 ADVERT, where ADVERT is advertising expenditure in $1000 units. The econometric consultant also claims that REVENUE is normally distributed with variance var(REVENUE(ADVERT) = 900. a. Draw a sketch of the relationship between expected REVENUE and ADVERT as ADVERT varies from 0 to 5. b. Compute the probability that REVENUE is greater than 110 if ADVERT = 2. Draw a sketch to illustrate your calculation. c. Compute the probability that REVENUE is greater than 110 if ADVERT = 3. d. Find the 2.5 and 97.5 percentiles of the distribution of REVENUE when ADVERT = 2. What is the probability that REVENUE will fall in this range if ADVERT = 2? e. Compute the level of ADVERT required to ensure that the probability of REVENUE being larger than 110 is 0.95.
Transcribed Image Text:P.8 The Shoulder and Knee Clinic knows that their expected monthly revenue from patients depends on their level of advertising. They hire an econometric consultant who reports that their expected monthly revenue, measured in $1000 units, is given by the following equation E(REVENUE ADVERT) = 100 + 20 ADVERT, where ADVERT is advertising expenditure in $1000 units. The econometric consultant also claims that REVENUE is normally distributed with variance var(REVENUE(ADVERT) = 900. a. Draw a sketch of the relationship between expected REVENUE and ADVERT as ADVERT varies from 0 to 5. b. Compute the probability that REVENUE is greater than 110 if ADVERT = 2. Draw a sketch to illustrate your calculation. c. Compute the probability that REVENUE is greater than 110 if ADVERT = 3. d. Find the 2.5 and 97.5 percentiles of the distribution of REVENUE when ADVERT = 2. What is the probability that REVENUE will fall in this range if ADVERT = 2? e. Compute the level of ADVERT required to ensure that the probability of REVENUE being larger than 110 is 0.95.
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