A Car Salesperson Has a 5% Chance of Landing a Sale

question 111

Short Answer

A car salesperson has a 5% chance of landing a sale with a random customer on the lot. Suppose 10 people come onto the lot today.
A) What is the probability that the salesperson sells exactly three cars today?
B) What is the probability he or she sells fewer than two cars today?
C) What is the expected number of cars he or she is going to sell today?

• A) What is the probability that the salesperson sells exactly three cars today?
• B) What is the probability he or she sells fewer than two cars today?
• C) What is the expected number of cars he or she is going to sell today?

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Definitions:

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it, also known as the "I-knew-it-all-along" effect.

Overestimate

To assess something as greater, larger, or more important than it actually is.

Predicted

Expected or forecasted based on current data or trends.

Mental Set

A tendency to approach situations in a certain way because that method worked in the past.