The Probability Distribution of the Daily Demand for a Product

question 8

Short Answer

The probability distribution of the daily demand for a product is shown below.
$$\begin{array} { c c } \text { Demand } & \text { Probability } \\0 & 0.05 \\1 & 0.10 \\2 & 0.15 \\3 & 0.35 \\4 & 0.20 \\5 & 0.10 \\6 & 005\end{array}$$
a. What is the expected number of units demanded per day?
b. Determine the variance and the standard deviation.

Understand the concept of supply elasticity and how to calculate it using the midpoint formula.

Analyze how elasticity affects government tax revenue and the burden of taxes on producers and consumers.

Recognize the behavioral implications of elasticity in public policy, such as the effectiveness of sin taxes.

Interpret graphical representations of supply and demand curves, including shifts due to tax impositions.

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Definitions:

Ten Years

This term refers to a period or duration of ten consecutive years.

Index Number

A numerical indicator that reveals variations in a single variable or a collection of variables across a period.

Sales Increased

An upward trend in the quantity or volume of goods or services sold by a business within a particular time frame.

CPI Increased

A rise in the Consumer Price Index, indicating a general increase in the prices of consumer goods and services.