A Major Department Store Has Determined That Its Customers Charge

question 28

Short Answer

A major department store has determined that its customers charge an average of $500 per month, with a standard deviation of $80. Assume the amounts of charges are normally distributed.
a.What percentage of customers charges more than $380 per month?
b.What percentage of customers charges less than $340 per month?
c.What percentage of customers charges between $644 and $700 per month?

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Definitions:

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers.

Binding Price Floor

A price floor set above the equilibrium price, causing a surplus by legally preventing the price from falling to its natural equilibrium level.

Surplus

The situation in which the quantity supplied of a good exceeds the quantity demanded, often leading to a drop in prices.

Equilibrium Price

Equilibrium price is the market price at which the quantity of goods supplied is equal to the quantity of goods demanded.