Find the Indicated Probability

question 15

Multiple Choice

Find the indicated probability. Round to three decimal places.
-A company purchases shipments of machine components and uses this acceptance sampling plan: Randomly select and test 26 components and accept the whole batch if there are fewer than 3 defectives. If a particular shipment of thousands of components actually has a 6% rate of defects,
What is the probability that this whole shipment will be accepted?

• A) 0.797
• B) 0.265
• C) 0.597
• D) 0.135

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Definitions:

Market Price

The current price at which a good or service can be bought or sold in a marketplace, determined by supply and demand forces.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to market equilibrium.

Quantity Supplied

The total amount of a particular good or service that producers are willing to provide at a given price.

Shortage

A market condition where the demand for a product or service exceeds its supply, often leading to higher prices or queuing.