Replacement Times for TV Sets Are Normally Distributed with a Mean

question 62

Multiple Choice

Replacement times for TV sets are normally distributed with a mean of 8.2 years and a standard deviation of 1.1 years, (based on data from "Getting Things Fixed, "Consumer Reports) . (i) The replacement time that separated the top 20% from the bottom 80% is 9.124 years.
(ii. The probability that a randomly selected TV will be replaced in less than 4.0 years is 0.40.

• A) (i) and (ii) are correct statements.
• B) (i) is a correct statement but not (ii).
• C) (ii) is a correct statement but not (i).
• D) (i) and (ii) are false statements.

---

Definitions:

Marginal Cost

The bump in overall costs arising from the production of an additional product or service unit.

Profit Increase

A rise in the difference between a business's revenues and its expenses, indicating improved financial performance.

Perfectly Competitive Firm

A company that operates in a market where there are many sellers and buyers, the product is homogeneous, and there are no barriers to entry or exit.

Breaks Even

A financial situation where total revenues are equal to total costs, resulting in no profit or loss.