At an Automatic Car Wash,cars Arrive Randomly at a Rate

question 9

Multiple Choice

At an automatic car wash,cars arrive randomly at a rate of 7 every 30 minutes.The car wash takes exactly 4 minutes (this is constant) .On average,how long would each car spend at the car wash?

• A)28 minutes
• B)32 minutes
• C)17 minutes
• D)24 minutes
• E)None of the above

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Definitions:

Coase Theorem

A principle that asserts if trade in an externality is possible and there are no transaction costs, parties can negotiate to solve the problem privately.

Spillover Costs

Costs of production that affect people who have no control over or involvement in the production process, also known as externalities.

Excise Taxes

A tax levied on specific goods or commodities produced or sold within a country, such as alcohol, cigarettes, and gasoline.

Government Intervention

Actions taken by a government to influence or regulate various activities within its economy, such as imposing taxes, subsidies, and regulations.