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A Product Has Four Components A, B, C, and D

question 25

Essay

A product has four components A, B, C, and D. The finished product must have a reliability of .95. The first three components come from a supplier, and have reliabilities of .99, .98, and .995. The fourth component is being designed now. What must the reliability of component D be in order to meet the product reliability condition?


Definitions:

Two-part Tariff

A pricing strategy that consists of a fixed fee plus a variable usage fee, common in services like utilities.

Entry Fee

An initial charge required to gain access to a service, event, or establishment.

Tying

Practice of requiring a customer to purchase one good in order to purchase another.

Price Discrimination

The strategy of selling the same product at different prices to different groups of buyers, often based on their willingness to pay.

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