An Alarm Company Reports That the Number of Alarms Sent

question 45

Multiple Choice

An alarm company reports that the number of alarms sent to their monitoring center from customers owning their system follow a Poisson distribution with λ = 4.6 alarms per year. Find the probability that a randomly selected customer had more than 7 alarms reported.

• A) 0.905
• B) 0.095
• C) 0.087
• D) 0.182
• E) 0.818

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Definitions:

Increasing Cost Industry

An industry in which costs of production increase as firms enter the market, often due to limited resources or factors of production becoming more expensive.

Long-Run Supply Curve

A graphical representation that shows how the quantity supplied reacts to price changes in the long-term, accounting for all factors of production adjustments.

Increasing Cost Industry

An industry in which the costs of production increase as the industry's output expands, typically due to resource limitations.

Decreasing-Cost Industry

An industry where the average cost of production decreases as the industry's output increases, often due to economies of scale.