Use the Poisson Model to Approximate the Probability

question 174

Multiple Choice

Use the Poisson model to approximate the probability. Round your answer to four decimal places.
-The probability that a car will have a flat tire while driving through a certain tunnel is 0.00004. Use the Poisson distribution to approximate the probability that among 7000 cars passing through this tunnel, at least one will
Have a flat tire.

• A) 0.7558
• B) 0.2116
• C) 0.7884
• D) 0.3126
• E) 0.2442

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Definitions:

Producer Surplus

The difference between the amount a producer is paid for a good compared to the minimum amount they would be willing to accept, representing profit.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service and the actual amount they receive due to higher market price.

Binding Price Ceiling

A government-imposed limit on the price of a product or service that is set below the market equilibrium, leading to shortages and a decrease in supply.

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount they receive due to market price.