A Dry Cleaner Has a Single Drive-Thru Window for Customers

question 10

Essay

A dry cleaner has a single drive-thru window for customers.The arrival rate of cars follows a Poisson distribution, while the service time follows an exponential distribution.The average arrival rate is 16 per hour and the average service time is three minutes.If the dry cleaner wants to accommodate (have enough room for)all of the waiting cars at least 96 percent of the time, how many car-lengths should they make the driveway leading to the window?

Understand the principles of marginal-cost and average-cost pricing in the context of regulated natural monopolies.

Analyze the effects of deregulation in electricity and natural gas delivery industries on prices.

Identify and interpret the profit-maximizing output and pricing decisions of monopolistic firms using graphical analysis.

Distinguish between private and public ownership of monopolies and their economic implications.

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time, illustrating the company's financial performance.

Supplies

Items used in the daily operations of a business, such as office or cleaning supplies, not directly tied to the products or services sold.

Adjusted Trial Balance

A listing of all company accounts that will appear in the financial statements after adjustments have been made for balances at the end of an accounting period.

Adjusting Journal Entries

Entries made in the general journal at the end of an accounting period to allocate revenues and expenses to the period in which they actually occurred.