Use the Poisson Model to Approximate the Probability

question 57

Multiple Choice

Use the Poisson model to approximate the probability. Round your answer to four decimal places.
-The rate of defects among CD players of a certain brand is 1.5%. Use the Poisson approximation to the binomial distribution to find the probability that among 430 such CD players received by a store, there are exactly three
Defective CD players.

• A) 0.9293
• B) 0.0530
• C) 0.1414
• D) 0.0707
• E) 0.1060

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Definitions:

Economic Losses

Financial deficits that occur when costs exceed revenues, or when the economic value generated is less than the resources used.

Zero Economic Profit

A situation where total revenue equals total cost, meaning the firm is covering all its opportunity costs but is not making excess profit.

Potential Competitors

Businesses not currently in the market but have the potential to enter and compete.

Market Entry

The strategy or means by which a company enters a new market to sell its products or services.