A Cappuccino Vending Machine Is Designed to Dispense an Average

question 20

Multiple Choice

A cappuccino vending machine is designed to dispense an average of  oz per cup. If the ounces per fill are Normally distributed, with a standard deviation of 0.4 oz, at what value should  be set so that 6 oz cups will overflow only 2% of the time?

• A)6.82 oz
• B)6.00 oz
• C)5.18 oz
• D)5.60 oz

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Definitions:

Consumer Surplus

The difference in consumer's payment expectation versus their actual expenditure on a good or service.

Demand Curve

A graph representing the relationship between the price of a good and the amount consumers are willing and able to purchase at various prices.

Producer Surplus

The difference between the actual price at which a producer sells a product and the minimum price they would be willing to accept, indicating producer gain.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually do pay.