Of the Following, the One That Most Resembles a Poisson

question 91

Multiple Choice

Of the following, the one that most resembles a Poisson random variable is the number of:

• A)heads in 200 flips of a fair coin.
• B)annual power failures at your residence.
• C)face cards in a bridge hand of 13 cards.
• D)defective CDs in a spool containing 15 CDs.

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Definitions:

Monopolist

An individual or firm that is the sole provider of a good or service, possessing significant market power over prices and output.

AC

Average Cost, also referred to as the cost per unit of output, often used interchangeably with Average Total Cost.

Deadweight Loss

The reduction in economic performance that is seen when a good or service fails to achieve the equilibrium in a free market.

Perfectly Competitive Industry

An industry structure characterized by many small firms, homogeneous products, and free entry and exit, leading to price-taking behavior.